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BANK OF AMERICA, NA v. KABBA | OK Supreme Court: Only presented evidence of an indorsed-in-blank note and an ‘Assignment of Mortgage'” With nothing more

BANK OF AMERICA, NA v. KABBA | OK Supreme Court: Only presented evidence of an indorsed-in-blank note and an ‘Assignment of Mortgage'” With nothing more


BANK OF AMERICA, NA v. KABBA
2012 OK 23
Case Number: 109660
Decided: 03/06/2012

THE SUPREME COURT OF THE STATE OF OKLAHOMA

NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION IN THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL.

 

BANK OF AMERICA, NA, Plaintiff/Appellee,

v.

MOMODU AHMED KABBA, Defendant/Appellant,
and
HUMU HAWAH KABBA, JOHN DOE and JANE DOE, Defendants.

ON APPEAL FROM THE DISTRICT COURT
OF CLEVELAND COUNTY
HONORABLE TOM A. LUCAS, DISTRICT JUDGE

¶0 Appeal of a June 13, 2011, summary judgment granted in favor of Bank of America, NA, against Momodu Ahmed Kabba (hereinafter Kabba) and his wife Humu Hawah Kabba (defendant below). This Court retained the matter on August 18, 2011. Kabba appeals the granting of Summary Judgment asserting Bank of America, NA, did not have standing to bring the action.

REVERSED AND REMANDED WITH INSTRUCTIONS

A. Grant Schwabe, KIVELL, RAYMENT AND FRANCIS, Tulsa, Oklahoma, for Plaintiff/Appellee.
James P. Cates, BAER TIMBERLAKE COULSON & CATES, PC, Oklahoma City, Oklahoma, for Plaintiff/Appellee.
J.R. Matthews, J R MATTHEWS LLC, Oklahoma City, Oklahoma, for Defendant/Appellants.

COMBS, J.

FACTUAL AND PROCURAL HISTORY

¶1 In a petition filed on March 11, 2010, Bank of America, NA, claiming to be the present holder of the note (hereinafter Bank of America) initiated a foreclosure action against Kabba and his wife. Bank of America claimed, at that time, to hold the note and mortgage as Successor by Merger to LaSalle Bank National Association, as Trustee under the Trust agreement for the Structured Asset Investment Loan Trust Series 2004-BNC2. A review of the note shows a blank indorsement. This blank indorsement was filed with the lower court for the first time in the motion for summary judgment. The blank indorsement was not mentioned or referenced in the original petition.

BNC Mortgage, Inc., was the original lender. Bank of America filed with the Court Clerk of Cleveland County, a document entitled “Assignment of Real Estate Mortgage” on January 17, 2011, therein claiming the assignment to be effective as of February 9, 2010. This was nine months after the filing of the petition to foreclose. Additionally, this “Assignment of Mortgage,” signed by Mortgage Electronic Registrations Systems, Inc. (hereinafter MERS), as nominee for BNC Mortgage, Inc., and its successors and assigns, merely named Bank of America as Successor by Merger to LaSalle Bank National Association, as Trustee under the Trust agreement for the Structured Asset Investment Loan Trust Series 2004-BNC2. There was no mention of the note in this “Assignment of Mortgage”. On June 13, 2011, Summary judgment was granted and memorialized by a Final Journal Entry of Judgment order in Bank of America’s favor, against Kabba and his wife. Kabba appeals this summary judgment asserting Bank of America failed to demonstrate standing.

STANDARD OF REVIEW

¶2 An appeal on summary judgment comes to this court as a de novo review. Carmichael v. Beller, 1996 OK 48, ¶2, 914 P.2d 1051, 1053. All inferences and conclusions are to be drawn from the underlying facts contained in the record and are to be considered in the light most favorable to the party opposing the summary judgment. Rose v. Sapulpa Rural Water Co., 1981 OK 85, 621 P.2d 752. Summary judgment is improper if, under the evidentiary materials, reasonable individuals could reach different factual conclusions. Gaines v. Comanche County Medical Hospital, 2006 OK 39, ¶4, 143 P.3d 203, 205.

ANALYSIS

¶3 Appellant argues Appellee does not have standing to bring this foreclosure action. Although Appellee has argued it holds the note, there is nothing in the record that shows when Appellee became the holder. The face of the note indicates it was indorsed in blank. However, this indorsement was not filed with the petition but with the motion for summary judgment. The purported “Assignment of Mortgage” was filed after the filing of the foreclosure proceedings and was signed by MERS, and not BNC Mortgage, Inc. The “Assignment of Mortgage” at no time mentioned the note.

¶4 The issue presented to this Court is standing. This Court has previously held:

Standing, as a jurisdictional question, may be correctly raised at any level of the judicial process or by the Court on its own motion. This Court has consistently held that standing to raise issues in a proceeding must be predicated on interest that is “direct, immediate and substantial.” Standing determines whether the person is the proper party to request adjudication of a certain issue and does not decide the issue itself. The key element is whether the party whose standing is challenged has sufficient interest or stake in the outcome.

Matter of the Estate of Doan, 1986 OK 15, ¶7, 727 P.2d 574, 576. In Hendrick v. Walters, 1993 OK 162, ¶ 4, 865 P.2d 1232, 1234, this Court also held:

Respondent challenges Petitioner’s standing to bring the tendered issue. Standing refers to a person’s legal right to seek relief in a judicial forum. It may be raised as an issue at any stage of the judicial process by any party or by the court sua sponte. (emphasis original)

Furthermore, in Fent v. Contingency Review Board, 2007 OK 27, footnote 19, 163 P.3d 512, 519, this Court stated “[s]tanding may be raised at any stage of the judicial process or by the court on its own motion.” Additionally in Fent, this Court stated:

Standing refers to a person’s legal right to seek relief in a judicial forum. The three threshold criteria of standing are (1) a legally protected interest which must have been injured in fact- i.e., suffered an injury which is actual, concrete and not conjectural in nature, (2) a causal nexus between the injury and the complained-of conduct, and (3) a likelihood, as opposed to mere speculation, that the injury is capable of being redressed by a favorable court decision. The doctrine of standing ensures a party has a personal stake in the outcome of a case and the parties are truly adverse.

Fent v. Contingency Review Board, 2007 OK 27, ¶7, 163 P.3d 512, 519-520. In essence, a plaintiff who has not suffered an injury attributable to the defendant lacks standing to bring a suit. And, thus, “standing [must] be determined as of the commencement of suit; . . .” Lujan v. Defenders of Wildlife, 504 U.S. 555, 570, n.5, 112 S.Ct. 2130, 2142, 119 L.Ed. 351 (1992).1

¶5 To commence a foreclosure action in Oklahoma, a plaintiff must demonstrate it has a right to enforce the note and, absent a showing of ownership, the plaintiff lacks standing. Gill v. First Nat. Bank & Trust Co. of Oklahoma City, 1945 OK 181, 159 P.2d 717.2 An assignment of the mortgage, however, is of no consequence because under Oklahoma law, “[p]roof of ownership of the note carried with it ownership of the mortgage security.” Engle v. Federal Nat. Mortg. Ass’n, 1956 OK 176, ¶7, 300 P.2d 997, 999. Therefore, in Oklahoma it is not possible to bifurcate the security interest from the note. BAC Home Loans Servicing, L.P. v. White, 2011 OK CIV APP 35, ¶ 10, 256 P.3d 1014, 1017. Because the note is a negotiable instrument, it is subject to the requirements of the UCC. A foreclosing entity has the burden of proving it is a “person entitled to enforce an instrument” by showing it was “(i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to Section 12A-3-309 or subsection (d) of Section 12A-3-418 of this title.” 12A O.S. 2001 §3-301.

¶6 To demonstrate you are the “holder” of the note you must establish you are in possession of the note and the note is either “payable to bearer” (blank indorsement) or to an identified person that is the person in possession (special indorsement).3 Therefore, both possession of the note and an indorsement on the note or attached allonge4 are required in order for one to be a “holder” of the note.

¶7 To be a “nonholder in possession who has the rights of a holder” you must be in possession of a note that has not been indorsed either by special indorsement or blank indorsement. Negotiation is the voluntary or involuntary transfer of an instrument by a person other than the issuer to a person who thereby becomes its holder. 12A O.S. 2001, § 3-201. Transfer occurs when the instrument is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument. 12A O.S. 2001, § 3-203. Delivery of the note would still have to occur even though there is no negotiation. Delivery is defined as the voluntary transfer of possession. 12A O.S. 2001, § 1-201(b)(15). The transferee would then be vested with any right of the transferor to enforce the note. 12A O.S. 2001, 3-203(b). Some jurisdictions have held, without holder status and therefore the presumption of a right to enforce, the possessor of the note must demonstrate both the fact of the delivery and the purpose of the delivery of the note to the transferee in order to qualify as the person entitled to enforce. In re Veal, 450 B.R. 897, 912 (B.A.P. 9th Cir. 2011). See also, 12A O.S. 2001, § 3-203.

¶8 In the present case, Appellee has only presented evidence of an indorsed-in-blank note and an “Assignment of Mortgage.” Appellee must prove that it is the holder of the note or the nonholder in possession who has the rights of a holder prior to the filing of the foreclosure proceeding. In the present matter the timeliness of the transfer is in question. Since Bank of America did not file the blank indorsement until it filed its motion for summary judgment it is impossible to determine from the record when Bank of America acquired its interest in the underlying note.

¶9 The assignment of a mortgage is not the same as an assignment of the note. If a person is trying to establish they are a nonholder in possession who has the rights of a holder they must bear the burden of establishing their status as a nonholder in possession with the rights of a holder. Appellee must establish delivery of the note as well as the purpose of that delivery. In the present case, it appears Appellee is trying to use the “Assignment of Mortgage” in order to establish the purpose of delivery. The “Assignment of Mortgage” purports to transfer “[f]or value received, the undersigned, Mortgage Electronic Registration Systems, Inc., as nominee for BNC Mortgage, Inc., and its successors and assigns does hereby assign, transfer and set over unto Bank of America, National Association as Successor by Merger to LaSalle Bank National Association, as Trustee under the Trust Agreement for the Structured Asset Investment Loan Trust Series 2004-BNC2, that certain real estate mortgage dated August 30, 2004, granted by Momodu Ahmed Kabba and Humu Hawah Kabba, husband and wife….” This language has been determined by other jurisdictions to not effect an assignment of a note but to be useful only in identifying the mortgage. Therefore, this language is neither proof of transfer of the note nor proof of the purpose of any alleged transfer. See, In re Veal, 450 B.R. 897, 905 (B.A.P. 9th Cir. 2011).

¶10 Appellee must show it became a “person entitled to enforce” prior to the filing of the foreclosure proceeding. In the present case, there is a question of fact as to when and if this occurred and summary judgment is not appropriate. Therefore, we reverse the granting of summary judgment by the trial court and remand back for further determinations. If it is determined Bank of America became a person entitled to enforce the note, as either a holder or nonholder in possession who has the rights of a holder after the foreclosure action was filed, then the case may be dismissed without prejudice and the action may be re-filed in the name of the proper party.

CONCLUSION

¶11 It is a fundamental precept of the law to expect a foreclosing party to actually be in possession of its claimed interest in the note, and to have the proper supporting documentation in hand when filing suit, showing the history of the note, so that the defendant is duly apprised of the rights of the plaintiff. This is accomplished by showing the party is a holder of the instrument or a nonholder in possession of the instrument who has the rights of a holder, or a person not in possession of the instrument who is entitled to enforce the instrument pursuant to 12A O.S. 2001, § 3-309 or 12A O.S. 2001, § 3-418. Likewise, for the homeowners, absent adjudication on the underlying indebtedness, the dismissal cannot cancel their obligation arising from an authenticated note, or insulate them from foreclosure proceedings based on proven delinquency and therefore, this Court’s decision in no way releases or exonerates the debt owed by the defendants on this home. See, U.S. Bank National Association v. Kimball 27 A.3d 1087, 75 UCC Rep.Serv.2d 100, 2011 VT 81 (VT 2011); and Indymac Bank, F.S.B. v. Yano-Horoski, 78 A.D.3d 895, 912 N.Y.S.2d 239 (2010).

REVERSED AND REMANDED WITH INSTRUCTIONS

¶12 CONCUR: TAYLOR, C.J., KAUGER, WATT, EDMONDSON, REIF, COMBS, JJ.

¶13 DISSENT: WINCHESTER (JOINS GURICH, J.), GURICH (BY SEPARATE WRITING), JJ.

¶14 RECUSED: COLBERT, V.C.J.

FOOTNOTES

1 The dissenting opinion in this matter relies upon Justice Opala’s concurring opinion in Toxic Waste Impact Group, Inc. v. Leavitt, 1994 OK 148, 890 P.2d 906, for the proposition that standing is not a jurisdictional question. Justice Opala’s concurring opinion was not the majority opinion of this Court and as such “a minority opinion has no binding, precedential value.” 20 Am.Jur. 2d Courts §138.

2 This opinion was promulgated prior to the enactment of the UCC. It is, however, possible for the owner of the note not to be the person entitled to enforce the note if the owner is not in possession of the note. (See the REPORT OF THE PERMANENT EDITORIAL BOARD FOR THE UNIFORM COMMERCIAL CODE, APPLICATION OF THE UNIFORM COMMERCIAL CODE TO SELECTED ISSUES RELATING TO MORTGAGE NOTES (NOVEMBER 14, 2011)).

3 12A O.S. 2001, §§ 1-201(b)(21), 3-204 and 3-205.

4 According to Black’s Law Dictionary (9th ed. 2009) an allonge is “[a] slip of paper sometimes attached to a negotiable instrument for the purpose of receiving further indorsements when the original paper is filled with indorsements.” See, 12A O.S. 2001, § 3-204(a).

 

GURICH, J., with whom WINCHESTER, J. joins dissenting:

¶1 I respectfully dissent. In this case, the record indicates that attached to Plaintiff’s Motion for Summary Judgment was an indorsed-in-blank note, an assignment of mortgage, and an affidavit verifying Plaintiff was the holder of the note and mortgage.1 Because the Plaintiff was the proper party to pursue the foreclosure and because the Plaintiff presented the proper documentation at summary judgment to prove such, I would affirm the trial court.

¶2 The majority states that “[t]o commence a foreclosure action in Oklahoma, a plaintiff must demonstrate it has a right to enforce the note, and absent a showing of ownership, the plaintiff lacks standing,” citing Gill v. First Nat. Bank & Trust Co., 1945 OK 181, 159 P.2d 717.2 See Majority Op. ¶ 5. I agree that in any foreclosure action a party must demonstrate it is the proper party to request adjudication of the issues. However, the issue of whether a party is the proper party to request adjudication of the issues is a real-party-in-interest issue, not an issue of “standing,” as the majority frames it. See Toxic Waste Impact Group, Inc. v. Leavitt, 1994 OK 148, 890 P.2d 906 (Opala, J., concurring). Justice Opala framed the issue correctly in Toxic Waste Impact Group:

Standing in the federal legal system is imbued with a constitutional/jurisdictional dimension, while in the body of state law it fits under the rubric of ordinary procedure. The U.S. Constitution, Article III, has long been held to require that a “case” or “controversy” is essential to invoke federal judicial jurisdiction and that a person’s competence to bring an action is a core component of standing in a case-or-controversy inquiry. It is for this reason that standing is an integral part of the mechanism for invoking the federal judiciary’s power.

Oklahoma’s fundamental law places no restraint on the judiciary’s power analogous to the federal case-or-controversy requirement. Under the earlier Code of Civil Procedure the suit had to be brought by the real party in interest. That requirement has always been non-jurisdictional. If a state court proceeded to adjudicate a claim pressed by one not in that status, its decision was not fraught with jurisdictional infirmity but rather regarded as erroneous for want of proof to establish an important element of the claim. An error in this category is waivable at the option of the defendant; and, if not asserted on appeal, the reviewing court may reach the merits of the case despite a plaintiff’s apparent lack of standing at nisi prius.

Toxic Waste Impact Group, Inc. v. Leavitt, 1994 OK 148, 890 P.2d 906 (Opala, J., concurring, ¶¶ 2-3) (emphasis added); see also Black Hawk Oil Co. v. Exxon, 1998 OK 70, ¶ 24, 969 P.2d 337, 344 (“Using the term ‘standing’ to designate real-party-in-interest issues tempts courts to apply standing principles outside the context in which they were developed. . . . A defendant is entitled to have the suit against him prosecuted by the ‘real party in interest’ but ‘his concern ends when a judgment for or against the nominal plaintiff would protect defendant from any action on same demand by another.”) (Watt, J., Majority Op.)

¶3 The majority in this case cites Hendrick v. Walters, 1993 OK 162, ¶ 4, 865 P.2d 1232, 1234 and Fent v. Contingency Review Board, 2007 OK 27, n.19, 163 P.3d 512, 519 for the proposition that “standing may be raised at any stage of the judicial process or by the court on its own motion.” See Majority Op. ¶ 4. Those cases cite Matter of the Estate of Doan, 1986 OK 15, ¶ 7, 7272 P.2d 574, as authority for this proposition. Arguably, however, Doan misstates the law:

Ever since the Code of Civil Procedure was replaced in 1984 by the Pleading Code, our nomenclature for identifying the party entitled to sue, which began to follow that of federal jurisprudence, has used “standing” as if it were a functional equivalent of the earlier procedural terms of art–real party in interest, one with appealable interest, one occupying the aggrieved-party or pecuniary-interest status. It was during this transition that one of our opinions inadvertently referred to “standing” in terms of a jurisdictional requirement, thus creating the misimpression that the term has a jurisdictional dimension. Oklahoma’s constitution has no case-or-controversy clause. Standing is hence to be viewed as an adjective-law concept. The inadvertent reference to the contrary should be treated as ineffective to alter standing’s true character in the body of our procedural law.

. . . .

I concur in today’s opinion and in the disposition of the cause. If I were writing for the court, I would additionally declare that Doan’s inadvertent reference to federal law is to be viewed as withdrawn. Lujan’s tripartite standing test, which we adopt today, must be treated as having been received sans its federal jurisdictional baggage.

See Toxic Waste Impact Group, 1994 OK 148 (Opala, J., concurring ¶ 4).

¶4 Additionally, both Hendrick and Fent were original actions in this Court. As such, “standing” could have been raised at any point by this Court sua sponte. However, in a proceeding in District Court, because it is a non-jurisdictional issue, failure to assert that the Plaintiff is not the real party in interest may be waived. See Liddell v. Heavner, 2008 OK 6, n.5, 180 P.3d 1191 (Opala, J., Majority Op.); see also 12 O.S. 2012 § 2008(D).

¶5 In this case, the facts demonstrate that the Defendant argued below that Plaintiff did not have a stake in the foreclosure and was not the real party in interest. As such, the issue was properly appealed. However, the facts also demonstrate that the Plaintiff was in fact the real party in interest and was the proper party to pursue the foreclosure. 12 O.S. 2012 § 2017. As such, I would affirm the trial court.

¶6 The majority also holds that a foreclosing party must have the “proper supporting documentation in hand when filing suit.” See Majority Op. ¶ 10 (emphasis added). Oklahoma pleading procedure does not require a plaintiff to have all evidence necessary to prevail on its claim at the time of the filing. Rather, what is required is a “short and plain statement of the claim showing that the pleader is entitled to relief.” 12 O.S. 2012 § 2008(A)(1). Additionally, 12 O.S.2012 § 2011(B)(3) provides that an attorney filing anything with the court certifies that to “the best of the person’s knowledge, information and belief, formed after an inquiry reasonable under the circumstances . . . the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery.” 12 O.S. 2012 § 2011(B)(3) (emphasis added).3

¶7 Mortgage foreclosures, like other civil actions, allow the parties to continue to investigate and discover evidence up until the time of judgment. In this case, the Plaintiff continued to investigate its claim up until the time of summary judgment. At the time of summary judgment it offered sufficient proof to the trial court that it had the right to foreclose on the mortgage.4

¶8 Plaintiff satisfied its burden of proof, and the trial court was correct in sustaining the motion and granting judgment to the Plaintiff. On appeal where no evidence indicates otherwise, there is a presumption that the judgment of the trial court conforms to the proof present at the trial. Gilkes v. Gilkes, 1964 OK 28, 389 P.2d 503. I cannot agree with the majority’s holding that the plaintiff must have the “proper supporting documentation in hand when filing suit” because no authority states such and the Oklahoma pleading code requires otherwise. The procedure imposed by the majority in this case will result in delay, will not affect the inevitable outcome of foreclosure, and will increase the homeowner’s debt. 5

FOOTNOTES

1 The record also indicates that the Defendant filed an answer and counterclaim pro se, but was later represented by counsel who filed a Combined Response and Objections to Plaintiff’s Motion for Summary Judgment and a Counter-Motion for Summary Judgment. At the hearing on the motions, the trial judge considered arguments of Counsel for the parties and reviewed the evidentiary materials offered, including the original note, the original mortgage, the assignment of the mortgage, and the affidavit.

2 In Gill, the plaintiff brought an action to foreclose a mortgage on real property. There was no discussion in the case of whether the plaintiff had standing to bring the action or whether the plaintiff was the real party in interest. In fact, the case was tried to the Court, and the appeal turned on the sufficiency of evidence presented at trial. The Gill decision stands for the proposition that the assignment of the note carries with it an assignment of the mortgage. It is not relevant to the standing analysis, nor does it stand for the proposition that the plaintiff must prove at the time of filing that it has a right to enforce the note.

3 Likewise, while I agree that the UCC applies in this case because the note is a negotiable instrument, the UCC does not require that a foreclosing entity prove at the time of filing that it is the person entitled to enforce the instrument.

4 Rule 13 of the Rules for District Courts permits a party to file evidentiary material with a motion for summary judgment. In this case, Plaintiff offered an indorsed-in-blank note, an assignment of mortgage, and an affidavit verifying Plaintiff as the holder of the note and mortgage.

5 On remand, rather than dismiss the petition, the trial court may allow the Plaintiff to amend its petition. HSBC Bank USA v. Lyon, 2012 OK 10, ¶ 1, __ P.3d __.

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Banks face crisis in bungled commercial mortgages

Banks face crisis in bungled commercial mortgages


Oh yes, MERS is in this rabbit hole as well: From a 10/10 post EXCLUSIVE | NYSC COMMERCIAL (CMBS), MERS and a $65 MILLION NOTE

If this doesn’t do them in then look for the Next Robo-Signing Scandal: RePOST: CHASE BANK v. GERGIS | NY Civ. Court “ROBO-TESTIMONY, WAMU, CREDIT-CARD DEBT” Dismissed w/ PREJUDICE

Either way the banks are screwed on these as well.

CBS-

The nation’s banks are looking at a robo-signing problem with commercial real estate which may dwarf the one for home mortgages, according to a new study.

Research by Harbinger Analytics Group shows the widespread use of inaccurate, fraudulent documents for land title underwriting of commercial real estate financing. According to the report:

This fraud is accomplished through inaccurate and incomplete filings of statutorily required records (commercial land title surveys detailing physical boundaries, encumbrances, encroachments, etc.) on commercial properties in California, many other western states and possibly throughout most of the United States.

[CBS NEWS]

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Bank of America Loses Foreclosure Class Action Motion to Dismiss in New Jersey – BEALS v. BOA

Bank of America Loses Foreclosure Class Action Motion to Dismiss in New Jersey – BEALS v. BOA


NEWARK, NJ, November 7, 2011 – Today Judge Katherine S. Hayden of the United States District Court for the District of New Jersey denied a motion by Bank of America, N.A. to dismiss the proposed class action Beals v. Bank of America, N.A. This action, was filed by Lawrence Friscia of the New Jersey law firm of Friscia & Associates, a boutique firm concentrating on foreclosure defense, and makes numerous allegations against Bank of America in connection with allegedly fraudulent and procedurally defective foreclosure actions brought by Bank of America against homeowners in New Jersey.

For inquiries related to this matter contact Lawrence Friscia. Mr. Friscia can be reached at (973) 500-8024. Please visit www.friscialaw.com for additional information.

OPINION Excerpt:

VI. Conclusion
For the foregoing reasons, this Court will not abstain from this case. Defendants‘ motion to dismiss is granted as to all claims for negligent processing of a loan modification, as to all claims under the Fair Debt Collection Practices Act, and as to Grullon‘s claims for breach of contract and breach of the duty of good faith and fair dealing. The motion is denied as to the Beals plaintiffs‘ breach of contract claim, the Beals plaintiffs‘ claim for a breach of the duty of good faith and fair dealing, all claims for fraud and negligent misrepresentation, and all claims under the New Jersey Consumer Fraud Act.

[ipaper docId=71964060 access_key=key-19ivzwooz1a1lh8xztvu height=600 width=600 /]

 

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Foreclosure Ruling Irks Banks

Foreclosure Ruling Irks Banks


Since they can’t find someone with real knowledge, they probably are stuck because the majority of the originating companies are long gone and so are the employees…just as planned.

Palm Beach Post-

WEST PALM BEACH — An appeals court ruling in favor of Wellington homeowners in foreclosure is causing “calamitous confusion,” according to bank attorneys who say it could snarl hundreds of thousands of pending foreclosure cases.

The bank is asking for a rehearing and clarification of the Sept. 7 decision by the 4th District Court of Appeal, which said a foreclosure affidavit submitted by a bank employee was hearsay because the person relied on computerized information and did not have personal knowledge of the case.

The lack of personal knowledge of foreclosure documents is the foundation of the robo-signing controversy that continues to delay foreclosure proceedings.

The bank is not challenging the court’s decision in Gary and Anita Glarum vs. LaSalle Bank, but it said the ruling has been misinterpreted to mean that the person relying on computerized records must be the one who actually entered them into the computer or the direct custodian of the record.

[PALM BEACH POST]

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GLARUM v. LASALLE BANK | FL 4DCA Reverses SJ “Home Loan Services Inc.’s Ralph Orsini Affidavit Fail”

GLARUM v. LASALLE BANK | FL 4DCA Reverses SJ “Home Loan Services Inc.’s Ralph Orsini Affidavit Fail”


DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT

July Term 2011

GARY GLARUM and ANITA GLARUM,
Appellants,

v.

LASALLE BANK NATIONAL ASSOCIATION, as Trustee for
Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed Certificates, Series 2006-FFI, FIRST WELLINGTON, INC., a dissolved
corporation, WELLINGTON SHORES HOMEOWNERS ASSOCIATION,
GREENVIEW SHORES NO.2 AT WELLINGTON HOMEOWNERS
ASSOCIATION, GREENVIEW SHORES HOMEOWNERS ASSOCIATION,
FIRST FRANKLIN FINANCIAL CORPORATION, and any unknown
heirs, devisees, grantees, creditors, and other unknown persons or
unknown spouses claiming by, through and under any of the abovenamed
parties,
Appellees.

No. 4D10-1372

[September 7, 2011]

PER CURIAM.

This appeal presents two issues. First, we consider whether the trial
court improperly granted a summary judgment of foreclosure in favor of
LaSalle Bank. We also consider whether the trial court erred in
sanctioning appellants’ counsel for filing frivolous pleadings pursuant to
section 57.105, Florida Statutes. We reverse the trial court’s entry of
summary judgment in favor of LaSalle in part, as LaSalle’s summary
judgment evidence was insufficient to establish the amount due to
LaSalle under the note and mortgage. We likewise reverse the entry of
sanctions against appellants’ counsel as improper. However, we find no
merit in appellants’ contention that LaSalle lacked standing to seek
foreclosure.

Appellants admitted in their answer that they had not made payments
according to the terms of the note, and as such, they were in default.
Appellants, however, denied LaSalle’s allegations regarding the amount
of the default. To establish the amount of appellants’ indebtedness for
summary judgment, LaSalle filed the affidavit of Ralph Orsini, a “specialist”
at the loan servicer, Home Loan Services, Inc. Orsini claimed
in the affidavit that appellants were in default of their payment
obligations and owed in excess of $340,000 on the note. In opposition to
the motion for summary judgment, appellants filed Orsini’s deposition,
wherein Orsini explained that he derived the $340,000 figure from his
company’s computer system. However, Orsini did not know who entered
the data into the computer, and he could not verify that the entries were
correct at the time they were made. To calculate appellants’ payment
history, Orsini relied in part on data retrieved from Litton Loan Servicing,
a prior servicer of appellants’ loan.

Florida Rule of Civil Procedure 1.510(c) requires a party moving for
summary judgment to “identify any affidavits, answers to interrogatories,
admissions, depositions, and other materials as would be admissible in
evidence.” If this evidence, taken in the light most favorable to the nonmoving
party, shows no genuine issue of material fact, the moving party
is entitled to judgment as a matter of law. Volusia Cnty. v. Aberdeen at
Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000).

We find that Orsini’s affidavit constituted inadmissible hearsay and,
as such, could not support LaSalle’s motion for summary judgment.
Pursuant to section 90.803(6)(a), Florida Statutes, documentary evidence
may be admitted into evidence as business records if the proponent of
the evidence demonstrates the following through a record’s custodian:
(1) the record was made at or near the time of the event; (2)
was made by or from information transmitted by a person
with knowledge; (3) was kept in the ordinary course of a
regularly conducted business activity; and (4) that it was a
regular practice of that business to make such a record.
Yisrael v. State, 993 So. 2d 952, 956 (Fla. 2008).

Orsini did not know who, how, or when the data entries were made
into Home Loan Services’s computer system. He could not state if the
records were made in the regular course of business. He relied on data
supplied by Litton Loan Servicing, with whose procedures he was even
less familiar. Orsini could state that the data in the affidavit was
accurate only insofar as it replicated the numbers derived from the
company’s computer system. Despite Orsini’s intimate knowledge of how
his company’s computer system works, he had no knowledge of how that
data was produced, and he was not competent to authenticate that data.
Accordingly, Orsini’s statements could not be admitted under section
90.803(6)(a), and the affidavit of indebtedness constituted inadmissible
hearsay. Because LaSalle presented no competent evidence to show
$422,677.85 in damages, the amount of the judgment to which LaSalle is
entitled remains at issue. Therefore, we reverse the entry of judgment in
favor of LaSalle and remand for further proceedings.

The trial court also entered sanctions against appellants’ counsel for
filing a “form affidavit” from an expert, Rita Lord, who opined on the
ability of lay persons to distinguish between original and high-quality
copies of promissory notes. Lord did not represent in the affidavit that
she reviewed the papers at issue in this case. Nevertheless, the trial
court was distressed by appellants’ counsel’s habit of filing “the same
affidavit in ten different cases, when [Lord] hasn’t seen the documents in
this case.” The court awarded LaSalle its reasonable attorney’s fees for
having to file a motion to strike Lord’s affidavit.

We note that LaSalle moved for sanctions under section 57.105,
Florida Statutes. That statute permits a trial court to award a
“reasonable attorney’s fee” to the “prevailing party” where the plaintiff’s
claim was frivolous or to a party to compensate for the opposing party’s
dilatory conduct. § 57.105(1)-(2), Fla. Stat. The trial court did not find
that appellants’ claims were frivolous, a n d th e trial court did not
conclude that Lord’s affidavit was filed to cause unreasonable delay.
Thus, section 57.105 could not serve as a basis for the award of
attorney’s fees to LaSalle.

To the extent that the trial court may have been exercising its
inherent authority to sanction parties or their attorneys, we also find
error. “[A] trial court possesses the inherent authority to impose
attorneys’ fees against an attorney for bad faith conduct.” Moakley v.
Smallwood, 826 So. 2d 221, 226 (Fla. 2002). To impose attorney’s fees
as a sanction under its inherent authority, the trial court must make an
“express finding of bad faith conduct” that is “supported by detailed
factual findings describing the specific acts of bad faith conduct that
resulted in the unnecessary incurrence of attorneys’ fees.” Id. at 227.
The trial court did not make any specific findings of bad faith on the
record, and the sanctions order must be reversed without prejudice. See
Finol v. Finol, 912 So. 2d 627, 629 (Fla. 4th DCA 2005). “Upon remand,
should the court be asked to reconsider the issue, any future hearing
and order must comply with the requirements of Moakley.” Id.

In summary, we reverse the judgment of foreclosure and the entry of
sanctions against appellants’ counsel a n d remand for further
proceedings consistent with this opinion.

Reversed and remanded.

CIKLIN, LEVINE, JJ., and THORNTON, JOHN W., JR., Associate Judge, concur.

* * *

Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Meenu Sasser, Judge; L.T. Case No. CA08-028930 AW.

Thomas Ice of Ice legal, P.A., Royal Palm Beach, for appellant.

Thomasina F. Moore and Dennis W. Moore of Butler & Hosch, P.A.,
Orlando, for appellee LaSalle Bank National Association.

Not final until disposition of timely filed motion for rehearing

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PARKER v. LASALLE BANK | FL 4DCA REVERSED/REMAND “SEWER SERVICE”

PARKER v. LASALLE BANK | FL 4DCA REVERSED/REMAND “SEWER SERVICE”


DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT

July Term 2011

CATHERINE PAIGE PARKER, et. al.,
Appellants,

v.

LASALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF THE STRUCTURED ASSET SECURITIES CORPORATION, STRUCTURED ASSET INVESTMENT LOAN TRUST, MORTGAGE PASS-THROUGH CERTIFICATES M SERIES 2003-BC8,
Appellee.

EXCERPT:

This case is more akin to Demars v. Village of Sandalwood Lakes
Homeowners Association, 625 So. 2d 1219 (Fla. 4th DCA 1993). In that
case, a homeowners association filed suit to foreclose o n a lien for
unpaid assessments and obtained judgment. The association attempted
personal service twice at the homeowner’s residence. A tenant at the
residence did not know how to contact the homeowner. To establish a
diligent search for constructive service, the association’s attorney called a
mortgage holder a n d th e power company. Neither would divulge
information over the phone, and the association’s attorney did not follow
up with a letter. The court held the association’s search did not meet the
standards of reasonable diligence because the attorney for the
association did not follow up on any of his inquiries. Therefore, the
constructive service was defective, rendering the judgment of foreclosure
voidable.

In this case, the record reflects only one return of service. According
to the affidavit of diligent search and inquiry, Harris next searched credit
information, directory assistance, motor vehicle records, the post office,
property tax records, national death records, and prison records to try
and locate Parker. However, the affidavit shows the search for Parker
was less than diligent. Regarding efforts to locate Parker at her last
known address (the subject property) is a statement that “Process Server
stated: Tenant occupied.” No indication exists as to when the process
server went to the premises or how h e determined it was “tenant occupied.”

Further, no indication exists that the process server inquired
of the tenant the whereabouts of Parker. Under the section of the
affidavit titled “Inquiry of Neighbors at Last Known Address,” it merely
states: “Unable to contact neighbors,” with no statement as to who made
attempt, or on what dates or any description of any attempt made.
Under the section “Freedom of Information Act Inquiry Made to US Postal
Service,” it says “Requested change of address or boxholder information
[at property address] on 2/19/09. Upon receipt of their response, will
promptly revert,” with no follow-up of any information received from the
post office.

“[P]roof of a few attempts at service of process are insufficient to prove
diligent search.” Demars, 625 So. 2d at 1221. In this case, personal
service was attempted only once. As in Demars, the affidavit of diligent
search filed in this case displays a pattern of failure to follow up on
inquiries and leads that could have revealed Parker’s location. Therefore,
we find LaSalle’s search did not meet the standards of reasonable
diligence. Further, this case is distinguishable from Reina in that Parker
was diligent in pursuing the motion to quash. Parker’s trial counsel filed
a special limited appearance to attack the service of process fourteen
days after entry of final judgment and filed an emergency motion to
quash six days later. Therefore, we reverse, finding the final judgment
entered in this case voidable, and remand for further proceedings.

Reversed and remanded.

WARNER and POLEN, JJ., concur.

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RISCH v. BANK OF AMERICA | FL 2DCA Reverses & Remands for an Evidentiary Hearing, FL Rule of Civil Procedure 1.540

RISCH v. BANK OF AMERICA | FL 2DCA Reverses & Remands for an Evidentiary Hearing, FL Rule of Civil Procedure 1.540


IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT


JANICE M. RISCH,
Appellant,

v.

BANK OF AMERICA, NATIONAL
ASSOCIATION, AS SUCCESSOR BY
MERGER TO LASALLE BANK, N.A. AS
TRUSTEE FOR ZUNI 2006-OA1,
Appellee.

Opinion filed August 3, 2011.

Appeal pursuant to Fla. R. App. P. 9.130
from the Circuit Court for Lee County; Hugh
E. Starnes, Senior Judge.

EXCERPT:

Janice M. Risch appeals the trial court’s denial of her emergency motion for rehearing or, in the alternative, for relief from judgment pursuant to Florida Rule of Civil Procedure 1.540. The record shows that the trial court conducted a hearing on Ms. Risch’s motion; however, there was no evidence presented. Since Ms. Risch’s motion asserted allegations of misrepresentation, which might give rise to relief pursuant to rule 1.540(b)(3), and since she attached an affidavit and records which could support her claim, we reverse and remand for an evidentiary hearing. See S. Bell Tel. & Tel. Co. v. Welden, 483 So. 2d 487, 489 (Fla. 1st DCA 1986) (“[W]here the moving party’s allegations raise a colorable entitlement to rule 1.540(b)(3) relief, a formal evidentiary hearing on the motion, as well as permissible discovery prior to the hearing, is required.”); see also Rosenthal v. Ford, 443 So. 2d 1077, 1078 (Fla. 2d DCA 1984) (“The  credibility of appellant’s allegations should only be determined by the trial court after an evidentiary hearing thereon.”).

Reversed and remanded.

SILBERMAN, C.J., and DAVIS, J., Concur.

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LASALLE v. FULK | Ohio Appeals Court Reversal “Tonya Hopkins Affidavit, AHMSI, Option One, Sand Canyon, Copy of Uncertified Assignment”

LASALLE v. FULK | Ohio Appeals Court Reversal “Tonya Hopkins Affidavit, AHMSI, Option One, Sand Canyon, Copy of Uncertified Assignment”


COURT OF APPEALS
STARK COUNTY, OHIO
FIFTH APPELLATE DISTRICT


LASALLE BANK, N.A.

-vs-

DOUGLAS MARK FULK, ET AL. AND
DAWNETTA G. ANTONACCI


EXCERPT:

{¶8} The Notice of Filing the Assignment of Mortgage states: “Attached hereto as Exhibit A is a recorded assignment of mortgage and reference to the captioned case.” The attachment is a copy of a notarized assignment of mortgage which states Sand Canyon Corporation, FKA Option One Mortgage Corporation grants, bargains, sells, assigns, transfers, conveys, sets over, and delivers to appellee as trustee for Structured Asset Investment Loan Trust, 2004-11, the mortgage securing the payment of a promissory note signed by appellant. The assignment of mortgage is not a certified copy, nor is it accompanied by an affidavit testifying it is a true copy of the original.

[…]

{¶9} In appellee’s affidavit regarding account and military status, Tonya Hopkins alleges she is a duly appointed officer of American Home Mortgage Servicing, Inc., successor in interest to Option One Mortgage Corporation, and competent to testify in the matter. The affidavit states American Home Mortgage Servicing, Inc. provides mortgage and foreclosure related servicing to appellee. The affidavit states that attached to it are Exhibits A and B, true and accurate copies of the original note and mortgage.

[…]

{¶31} Appellee asserts the assignment of mortgage does not need to be authenticated because it is a notarized document. We disagree. It is not a notarized document, but rather a copy of a notarized document. The copy does not state the volume and page wherein it is recorded, and it is not certified by the records custodian. We find it does not constitute proper evidentiary material upon which the court can rely in determining appellee has standing to foreclose on the note and mortgage.

{¶32} Appellee denies the appellant properly endorsed the forbearance agreement, but on remand it should explain the significance of the loan modification agreement signed by appellant and attached to appellee’s complaint. It appears there is an issue of whether appellee retained and credited appellant’s account with payments she submitted pursuant to the agreement.

[…]

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DailyFinance | COURT: Busted Securitization Prevents Foreclosure

DailyFinance | COURT: Busted Securitization Prevents Foreclosure


On March 30, an Alabama judge issued a short, conclusory order that stopped foreclosure on the home of a beleaguered family, and also prevents the same bank in the case from trying to foreclose against that couple, ever again. This may not seem like big news — but upon review of the underlying documents, the extraordinarily important nature of the decision and the case becomes obvious.

No Securitization, No Foreclosure



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Ka-B°oO°M!!! Alabama Judge Denies Securitization Trustee Standing To Foreclose HORACE v. LaSALLE BANK NA

Ka-B°oO°M!!! Alabama Judge Denies Securitization Trustee Standing To Foreclose HORACE v. LaSALLE BANK NA


Attorney Nick Wooten does it again and again!

PHYLLIS HORACE

v.

LASALLE BANK NATIONAL
ASSOCIATION, et al

EXCERPT:

ORDERED, ADJUDGED, AND DECREED:

Following hearing and review of all submissions from the parties the Court has come to two conclusions necessary for the disposition of this case:

First, the Court is surprised to the point of astonishment that the defendant trust (LaSalle Bank National Association) did not comply with the terms of it’s own Pooling and Servicing Agreement and further did not comply with the New York Law in attempting to obtain assignment of plaintiff Horac’s note and mortgage.

Second, the plaintiff Horace is a third party beneficiary of the Pooling and Servicing Agreement created by the defendant trust (Lasalle Bank National Association). Indeed without such Pooling and Servicing Agreements, plaintiff Horace and other mortgages similarly situated would never have been able to obtain financing.

[…]

Continue below…

[Full Docs]

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OHIO Appeals Court Reverses Judgment ‘Clerical Errors, Misstatement, Trial Court Entry Nullity’ LaSALLE BANK v. SCOLARO

OHIO Appeals Court Reverses Judgment ‘Clerical Errors, Misstatement, Trial Court Entry Nullity’ LaSALLE BANK v. SCOLARO


LASALLE BANK NATIONAL ASSOCIATION AS TRUSTEE FOR FIRST FRANKLIN MORTGAGE LOAN TRUST 2007-1, MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2007-1, Appellee,

v.

JOSEPH M. SCOLARO, et al., Appellants.

C.A. No. 25084.

Court of Appeals of Ohio, Ninth District, Summit County.

March 16, 2011.

CARR, Judge.

{¶ 1} Appellant, Joseph Scolaro, appeals the judgment of the Summit County Court of Common Pleas. This Court reverses.

I.

{¶ 2} On July 18, 2008, LaSalle Bank National Association (hereinafter referred to as “LaSalle”), the original plaintiff, brought this action against Scolaro seeking money judgment against Scolaro based on a January 10, 2007 promissory note in the amount of $225,250.00 plus interest at a rate of 9.60 percent per year from February 1, 2008, plus court costs, advances, and other charges allowed by law. LaSalle also sought to foreclose upon Scolaro’s property based on the mortgage dated January 10, 2007. LaSalle also sued Judy E. Scolaro and the unknown spouse of Joseph Scolaro.

{¶ 3} The parties subsequently participated in resolution and settlement conferences. On April 16, 2009, Joseph Scolaro filed an answer in which he asserted multiple affirmative defenses. The affirmative defenses alleged LaSalle was not the proper party plaintiff, that LaSalle lacked standing, and that LaSalle failed to give proper and requisite notice to Scolaro prior to initiating foreclosure. On April 29, 2009, LaSalle filed a motion to substitute Bank of America, National Association (hereinafter referred to as “Bank of America”) as the plaintiff. This motion was granted by the trial court on April 30, 2009. On June 22, 2009, Bank of America filed a motion for summary judgment, along with an affidavit in support. On August 20, 2009, after being granted an extension of time, Joseph Scolaro filed a brief in opposition with supporting affidavit, as well as his own motion for summary judgment. On September 30, 2009, Bank of America filed a reply in support of its motion for summary judgment and a response to Joseph Scolaro’s motion for summary judgment. On that same day, Bank of America filed a motion for default judgment against Judy E. Scolaro and the unknown spouse of Joseph Scolaro.

{¶ 4} On October 9, 2009, the trial court entered a default judgment against Judy E. Scolaro and the unknown spouse. Also on October 9, 2009, the trial court granted summary judgment against Joseph Scolaro, finding that the substituted plaintiff, Bank of America, had filed a motion for summary judgment and Joseph Scolaro had filed no opposition to the motion. On November 6, 2009, Scolaro filed a notice of appeal.

{¶ 5} On January 28, 2010, Bank of America moved to stay the appeal and remand the matter to the trial court to correct what it described as a “clerical error” in the judgment entry from which the appeal was taken. Bank of America also requested leave to file a motion with the trial court to correct the omission of the motion for summary judgment from the record. On February 8, 2010, Scolaro responded in opposition, asking this Court to deny the portion of Bank of America’s motion requesting a remand to correct a clerical error in the judgment entry. Scolaro argued that the trial court’s finding that he had not filed a response to the motion for summary judgment was not a clerical error and, thus, could not be cured upon the filing of a Civ.R. 60(A) motion. On February 19, 2010, this Court granted the motion to stay the appellate proceedings and ordered the matter “remanded to the trial court for 30 days to rule on Bank of America’s anticipated Civ.R. 60(A) motion.” This Court’s journal entry specifically noted that the “stay and remand [would] automatically expire 30 days from the journalization of [the] order” and required that Bank of America move this Court to continue the stay if the trial court needed additional time to rule on the motion.

{¶ 6} On February 26, 2010, Bank of America filed with the trial court a “motion for an amended and restated judgment nunc pro tunc and revised transcript to correct clerical errors.” In its motion, Bank of America invoked Civ.R. 60(A) and requested that the trial court correct its statement in the October 9, 2009 journal entry that Scolaro had not filed an opposition in response to Bank of America’s motion for summary judgment. Bank of America also requested that the trial court correct the record which failed to reflect that Bank of America had filed a motion for summary judgment on June 22, 2009. Also filed on February 26, 2010, was the affidavit of Attorney April Brown, co-counsel for Bank of America. In the affidavit, Attorney Brown acknowledged that she had prepared a draft of the order granting summary judgment for the convenience of the trial court. Attorney Brown averred that in preparing this entry, she worked from a Summit County form she had previously used. Attorney Brown averred that she accidentally failed to delete the erroneous sentence from the foundational form which stated, “There has been no opposition filed in response to the *** Motion for Summary Judgment.” Attorney Brown averred that “[t]he inclusion of this sentence was accidental, and it did not reflect the procedural history of the case now before this Court.” On March 15, 2010, Joseph Scolaro filed a brief in opposition to Bank of America’s motion. In his brief, Scolaro argued that the aforementioned error in the judgment entry was not mistake or omission which was mechanical in nature and could not be corrected pursuant to Civ.R. 60(A). Scolaro also requested in his motion that the trial court vacate the order for sale of his property which has been issued on October 23, 2009.

{¶ 7} On March 19, 2010, Bank of America filed a motion to continue the stay with this Court. On March 22, 2010, the trial court issued an entry captioned “nunc pro tunc amended and restated judgment and decree in foreclosure and reformation of mortgage and deed.” In the nunc pro tunc entry, the trial court noted that Scolaro had filed an answer to the complaint as well as a memorandum and affidavit in opposition to Bank of America’s motion for summary judgment. The entry stated that “[a]fter due consideration of the submissions of the parties, the Court further finds that there is no genuine issue of material fact and that Bank of America is entitled to summary judgment as a matter of law.”

{¶ 8} On March 29, 2010, Bank of America filed with this Court a notice of correction of record and motion to lift stay. On April 6, 2010, this Court issued a journal entry granting Bank of America’s motion and allowing twenty days for Scolaro to either file a new merit brief or a notice of reliance upon his prior brief. On April 26, 2010, Scolaro filed a notice that he intended to rely on his prior brief.

{¶ 9} On appeal, Scolaro raises two assignments of error.

II.

ASSIGNMENT OF ERROR I

“THE TRIAL COURT ERRED WHEN IT GRANTED SUMMARY JUDGMENT TO THE SUBSTITUTED PLAINTIFF BANK OF AMERICA, NATIONAL ASSOCIATION AS IT FAILED TO CONSIDER JOSEPH SCOLARO’S RESPONSE IN OPPOSITION TO THE SUBSTITUTED PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT AND INCORRECTLY FOUND THAT NO RESPONSE HAD BEEN FILED EVEN THOUGH A TIMELY RESPONSE AND AFFIDAVIT HAD BEEN FILED.”

{¶ 10} In his first assignment of error, Scolaro argues the trial court erred in granting summary judgment in favor of Bank of America because it failed to consider Scolaro’s response to the motion and found that no response had been filed. This Court agrees.

{¶ 11} This Court reviews an award of summary judgment de novo. Grafton v. Ohio Edison Co. (1996), 77 Ohio St.3d 102, 105. This Court applies the same standard as the trial court, viewing the facts in the case in the light most favorable to the non-moving party and resolving any doubt in favor of the non-moving party. Viock v. Stowe-Woodward Co. (1983), 13 Ohio App.3d 7, 12.

{¶ 12} Pursuant to Civ.R. 56(C), summary judgment is proper if:
“(1) No genuine issue as to any material fact remains to be litigated; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclusion, and viewing such evidence most strongly in favor of the party against whom the motion for summary judgment is made, that conclusion is adverse to that party.” Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 327.

{¶ 13} To prevail on a motion for summary judgment, the party moving for summary judgment must be able to point to evidentiary materials that show that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. Dresher v. Burt (1996), 75 Ohio St.3d 280, 293. Once a moving party satisfies its burden of supporting its motion for summary judgment with sufficient and acceptable evidence pursuant to Civ.R. 56(C), Civ.R. 56(E) provides that the non-moving party may not rest upon the mere allegations or denials of the moving party’s pleadings. Rather, the non-moving party has a reciprocal burden of responding by setting forth specific facts, demonstrating that a “genuine triable issue” exists to be litigated for trial. State ex rel. Zimmerman v. Tompkins (1996), 75 Ohio St.3d 447, 449.

{¶ 14} It is axiomatic that the non-moving party’s reciprocal burden does not arise until after the moving party has met its initial evidentiary burden. To do so, the moving party must set forth evidence of the limited types enumerated in Civ.R. 56(C), specifically, “the pleadings, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence, and written stipulations of fact[.]” Civ.R. 56(C) further provides that “[n]o evidence or stipulation may be considered except as stated in this rule.”

{¶ 15} On February 26, 2011, Bank of America filed a motion for an amended judgment pursuant to Civ.R. 60(A). In its motion, Bank of America noted the trial court’s original judgment entry incorrectly stated that Scolaro had not filed a brief in opposition to Bank of America’s motion for summary judgment. Bank of America characterized this error as a “misstatement” and argued that the “[t]he Judgment and Decree was not entered until several weeks after Bank of America filed its Reply to Scolaro’s Memorandum in Opposition to Bank of America’s Motion for Summary Judgment, thus affording this Court ample time to review and evaluate the parties’ arguments.” In an affidavit which was filed simultaneously to the Civ.R. 60(A) motion, counsel for Bank of America, April Brown, averred that she had prepared a draft of the judgment entry, but failed to delete the erroneous sentence.

{¶ 16} Civ.R. 60(A) states:
“Clerical mistakes in judgments, orders or other parts of the record and errors therein arising from oversight or omission may be corrected by the court at any time on its own initiative or on the motion of any party and after such notice, if any, as the court orders. During the pendency of an appeal, such mistakes may be so corrected before the appeal is docketed in the appellate court, and thereafter while the appeal is pending may be so corrected with leave of the appellate court.”

Within the context of Civ.R. 60(A), a “clerical mistake” is “a type of mistake or omission mechanical in nature which is apparent on the record and which does not involve a legal decision or judgment by an attorney.” Paris v. Georgetown Homes, Inc. (1996), 113 Ohio App.3d 501, 503, quoting Dentsply Internatl., Inc. v. Kostas (1985), 26 Ohio App.3d 116, 118. The Tenth District has stated, “The decision whether a submitted entry accurately reflects a decision rendered by the court involves the exercise of discretion by the court, and therefore is not subject to correction under Civ.R. 60(A).” Dokari Invests., LLC v. DFG2, LLC, 10th Dist. No. 08AP-664, 2009-Ohio-1048, at ¶ 16.

{¶ 17} In this case, the trial court’s actions on remand went beyond the scope of merely correcting a clerical mistake in its original judgment entry. As noted above, once a moving party satisfies its burden of supporting its motion for summary judgment with sufficient and acceptable evidence, the non-moving party has a reciprocal burden of responding by setting forth specific facts to demonstrate that a “genuine triable issue” exists to be litigated for trial. Tompkins, 75 Ohio St.3d at 449. Under this standard, the trial court’s erroneous finding in its October 9, 2009 judgment entry that Scolaro had not filed a response to Bank of America’s motion for summary judgment was not merely a mechanical error. Rather, it was a significant finding that was relevant in resolving the legal issue before the court. “A trial court may or may not sign prepared entries at its discretion.” State v. Sapp, 5th Dist. No. 07CA11, 2008-Ohio-5083, at ¶ 27. In exercising its discretion to sign the October 9, 2009 judgment entry, the trial court confirmed that the content of the entry accurately reflected the basis for its ruling. It follows that the erroneous finding that Scolaro had not filed a response to the motion for summary judgment was not subject to correction under Civ.R. 60(A). See Dokari at ¶ 16. By requesting that the trial court issue “an amended and restated judgment nunc pro tunc,” Bank of America was, in effect, asking the trial court to reconsider a final order. It is well-settled that “motions for reconsideration of a final judgment in the trial court are a nullity.” Price v. Carter Lumber Co., 9th Dist. No. 24991, 2010-Ohio-4328, at ¶ 11, quoting Pitts v. Ohio Dept. of Transp. (1981), 67 Ohio St.2d 378, paragraph one of the syllabus. This Court has stated that “any order granting such a motion is likewise a nullity.” State v. Keith, 9th Dist. No. 08CA009362, 2009-Ohio-76, at ¶ 8. Therefore, as the trial court’s judgment entry issued on March 22, 2010 was a nullity, this Court must look to the trial court’s October 9, 2009 judgment entry in reviewing Scolaro’s first assignment of error.

{¶ 18} Turning to the merits of Scolaro’s assignment of error, this Court concludes that the trial court’s judgment must be reversed. As discussed above, the trial court found that Bank of America’s motion for summary judgment was unopposed. The record indicates that Scolaro filed a brief in opposition to the motion for summary judgment, along with an affidavit in support, as well as a cross-motion for summary judgment, on August 20, 2009. Subsequently, on September 30, 2009, Bank of America filed a reply in support of its motion for summary judgment and a response to Joseph Scolaro’s motion for summary judgment. On remand, the trial court must make substantive determinations on the competing motions for summary judgment giving consideration to all relevant submissions by the parties.

{¶ 19} Scolaro’s first assignment of error is sustained.

ASSIGNMENT OF ERROR II

“THE TRIAL COURT ERRED WHEN IT GRANTED SUMMARY JUDGMENT TO THE SUBSTITUTED PLAINTIFF BANK OF AMERICA, NATIONAL ASSOCIATION AS THERE WERE GENUINE ISSUES OF MATERIAL FACT AND THE SUBSTITUTED PLAINTIFF WAS NOT ENTITLED TO SUMMARY JUDGMENT AS A MATTER OF LAW.”

{¶ 20} In his second assignment of error, Scolaro argues the trial court erred in granting summary judgment to Bank of America because there were genuine issues of material fact. Because our resolution of the first assignment of error is dispositive of this appeal, this Court declines to address the Scolaro’s second assignment of error as it is rendered moot. See App.R. 12(A)(1)(c).

III.

{¶ 21} Scolaro’s first assignment of error is sustained. Scolaro’s second assignment of error is rendered moot. The judgment of the Summit County Court of Common Pleas is reversed, and the cause remanded for further proceedings consistent with this decision.

Judgment reversed, and cause remanded.

There were reasonable grounds for this appeal.

We order that a special mandate issue out of this Court, directing the Court of Common Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy of this journal entry shall constitute the mandate, pursuant to App.R. 27.

Immediately upon the filing hereof, this document shall constitute the journal entry of judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period for review shall begin to run. App.R. 22(E). The Clerk of the Court of Appeals is instructed to mail a notice of entry of this judgment to the parties and to make a notation of the mailing in the docket, pursuant to App.R. 30.
Costs taxed to Appellee.

DICKINSON, P. J., MOORE, J., CONCUR.

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IL Appeals Court Vacates Judgment, Quash Service of Summons

IL Appeals Court Vacates Judgment, Quash Service of Summons


LASALLE BANK NATIONAL ASSOCIATION,
as Trustee for Certificate holders of Bear Sterns
Asset Back Securities I LLC Asset Backed
Certificates, Series 2004-FR3,

v.

UNKNOWN HEIRS AND LEGATEES OF
CANDICE WILLIS, DECEASED, AVANTA R.
WILLIS, ENRICO D. WILLIS, MORTGAGE
ELECTRONIC REGISTRATION SYSTEMS,
INC., as nominee for Fremont Investment & Loan,
UNKNOWN OWNERS and NON-RECORD

Excerpt:

ORDER
Held: The trial court erred in finding defendant Avanta R. Willis waived the issue of personal jurisdiction by filing documents with the court after entry of a default judgment and therefore, the trial court improperly denied defendant’s motion to vacate judgment and to quash service of summons. The judgment of foreclosure
and confirmation of judicial sale are vacated. The cause is remanded to the trial court for further proceedings.

<SNIP>

The motion included defendant’s assertion that she was not a white woman as set forth in the proof of service, that she was not personally served with process in this case, and that a copy of the summons was “stuffed into her mail box.”

<SNIP>

On January 12, 2010, new counsel entered his appearance on defendant’s behalf, and the court continued the cause for hearing. On January 26, 2010, defendant’s new counsel filed a reply to plaintiffs’ response to defendant’s motion to vacate judgment and quash service. In the reply, defendant stated that Karen Crohan, listed as the special process server on plaintiffs’ affidavit of service, was not a licensed detective in the State and was not appointed by the court to serve defendant. According to the reply, Crohan was an employee of Proveset LLC, a licensed detective agency. Also according to the reply, defendant again claimed that she was not served with summons, that plaintiffs failed to rebut defendant’s affidavit that she was not served, and that the trial court’s ex parte order of default was void.

On February 18, 2010, the trial court conducted a hearing on defendant’s motion to vacate judgment and quash service. Defense counsel argued to the court that plaintiffs’ affidavit of service indicated that the process server served a white female, that defendant was African American, that no one else lived with defendant and that the special process server did not comply with the relevant statutes. Plaintiffs’ counsel responded that defendant had waived the issue because defendant filed two prior petitions to vacate and that neither petition attacked personal jurisdiction.

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U.S. 3rd Circuit Court Of Appeals “FDCPA, CLASS ACTION” ALLEN v. LASALLE, FEIN, SUCH, KAHN AND SHEPARD, PC

U.S. 3rd Circuit Court Of Appeals “FDCPA, CLASS ACTION” ALLEN v. LASALLE, FEIN, SUCH, KAHN AND SHEPARD, PC


DOROTHY RHUE ALLEN,
v.
LASALLE BANK, N.A; CENLAR FEDERAL SAVINGS BANK FSB; FEIN, SUCH, KAHN AND SHEPARD, PC;

No. 09-1466.

United States Court of Appeals, Third Circuit.

Argued September 14, 2010.

Filed: January 12, 2011.

Lewis G. Adler (Argued), Woodbury, N.J. 08096, Roger C. Mattson, Woodbury, N.J. 08096, Attorneys for Appellant.

Andrew C. Sayles (Argued) Gregory E. Peterson, Connell Foley, Roseland, N.J. 08068, Attorneys for Appellee Fein, Such, Kahn and Shepard, P.C.

Daniel C. Green, Vedder Price, New York, N.Y. 10019, Chad A. Schiefelbein (Argued), Vedder Price, Chicago, IL 60601, Attorneys for Appellee LaSalle Bank.

Gregory A. Lomax, Christopher L. Soriano, Morgan J. Zucker, Duane Morris, Cherry Hill, N.J. 08003, Attorneys for Appellee Cenlar Federal Savings Bank.

Before: SLOVITER, BARRY, and SMITH Circuit Judges.

OPINION OF THE COURT
SLOVITER, Circuit Judge.
This appeal presents the question whether a communication from a debt collector to a consumer’s attorney is actionable under the Federal Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692f(1).
Continue below…

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2-4-1 CT Appeals Court Reversals: LaSalle v. BIALOBRZESKI, DEUTSCHE BANK NATIONAL TRUST COMPANY, v. PAUL BIALOBRZESKI

2-4-1 CT Appeals Court Reversals: LaSalle v. BIALOBRZESKI, DEUTSCHE BANK NATIONAL TRUST COMPANY, v. PAUL BIALOBRZESKI


DEUTSCHE BANK NATIONAL TRUST COMPANY, TRUSTEE,
v.
PAUL BIALOBRZESKI.

(AC 29884).

Appellate Court of Connecticut.
Argued January 13, 2010.
Officially released September 21, 2010.

Paul Bialobrzeski, pro se, the appellant (defendant).

Andrew P. Barsom, for the appellee (plaintiff).

Flynn, C. J., and Bishop and Robinson, Js.[*]

Opinion

ROBINSON, J.

In this foreclosure action, the pro se defendant, Paul Bialobrzeski, claims that the plaintiff[1] lacked standing to bring the action because it was not in possession of the subject note and mortgage at the time the action was commenced. The resolution of that claim is predicated on a finding of fact that is not part of the record. Our rules of practice require the appellant to provide an adequate record for review. See Practice Book §§ 60-5 and 61-10. Because the record is devoid of a factual finding as to when the plaintiff came into possession of the note, we are unable to review the claim as to the court’s subject matter jurisdiction. We therefore reverse the judgment of the trial court and remand the case for further proceedings.

The following procedural history is relevant to the defendant’s appeal. On October 22, 2007, the plaintiff caused a writ of summons and complaint to be served on the defendant to foreclose the mortgage on real property located at 254 Slater Road in New Britain. The defendant filed a pro se appearance on November 19, 2007. On December 4, 2007, the plaintiff filed a motion for default for failure to plead, which was granted by the clerk. On December 13, 2007, the defendant filed an answer[2] and a motion for a continuance to retain counsel. On December 17, 2007, the court, Domnarski, J., opened the default in view of the answer filed by the defendant. On January 22, 2008, the plaintiff filed a motion for summary judgment, claiming that “there are no genuine issues as to any material facts, and therefore moves for [s]ummary [j]udgment as to liability only.”[3] The defendant did not file an objection thereto. Summary judgment as to the defendant’s liability was granted summarily by the court, Dunnell, J., on February 11, 2008.[4]

On March 17, 2008, the defendant filed a motion for a continuance in which he represented that he had retained counsel, who was out of the state on business, and that counsel was necessary to articulate the defendant’s defenses and to “press forward” his motion for permission to amend his answer and to file special defenses.[5] The plaintiff objected to the motion to amend.[6] On March 27, 2008, the defendant filed a motion to dismiss the action. In a memorandum of law in support of the motion, he stated: “The plaintiff . . . commenced this foreclosure action on October 19, 2007. The plaintiff claims ownership of the mortgage through an assignment dated November 8, 2007 and recorded November 28, 2007. The note submitted as an exhibit contains no endorsement and no date.” Judge Domnarski denied the motion to dismiss and sustained the plaintiff’s objection thereto. On April 21, 2008, Judge Domnarski rendered judgment of foreclosure by sale, setting a sale date of August 2, 2008. The defendant filed this appeal on May 6, 2008,[7] and thereafter a motion for articulation.

In response to the defendant’s motion for articulation seeking the basis of the court’s denial of his motion to dismiss, Judge Domnarski articulated: “(1) Summary judgment as to liability had previously been entered against the defendant on February 11, 2008, Dunnell, J. [and] (2) The plaintiff alleged in paragraph 4 of the complaint that it is the holder of the note and mortgage. See Villager Pond, Inc. v. [Darien], 54 Conn. App. 178 [734 A.2d 1031 (1999)].” The defendant did not seek further articulation or file a motion for review in this court. See Practice Book § 66-7.

On appeal, the defendant claims that Judge Domnarski erred “in denying the defendant’s [m]otion to [d]ismiss a mortgage foreclosure action in which the [writ of] summons, and complaint had been initiated by a plaintiff which did not own either the note or the mortgage at the time the action was initiated, lacked standing to pursue the foreclosure action, and the trial court lacked subject matter jurisdiction to grant the [m]otion for [f]oreclosure.”

We begin by setting forth the appropriate standard of review. “A motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court. . . . [O]ur review of the trial court’s ultimate legal conclusion and resulting [denial] of the motion to dismiss will be de novo. . . . Factual findings underlying the court’s decision, however, will not be disturbed unless they are clearly erroneous. . . . The applicable standard of review for the denial of a motion to dismiss, therefore, generally turns on whether the appellant seeks to challenge the legal conclusions of the trial court or its factual determinations.” (Citations omitted; emphasis added; internal quotation marks omitted.) State v. Bonner, 290 Conn. 468, 477-78, 964 A.2d 73 (2009).

We first look to the relevant allegations of the plaintiff’s complaint. At paragraph 4, the plaintiff alleged, in part, “The Plaintiff, Deutsche Bank National Trust Company, as Trustee for Long Beach Mortgage Loan Trust 2006-3, is the holder of said Note and Mortgage.” In answering the complaint, the defendant left the plaintiff to its proof as to that allegation. When the plaintiff filed its motion for summary judgment on January 22, 2008, it attached copies of the subject note and mortgage and an assignment of the mortgage. The defendant failed to object to the motion for summary judgment or to submit any evidence that would create a genuine issue of material fact as to when the plaintiff acquired the note. See Practice Book § 17-45. Judge Dunnell granted the motion for summary judgment as to the defendant’s liability on February 11, 2008. The defendant did not file a motion to reargue but instead, on March 17, 2008, filed a motion for permission to amend his answer and to file special defenses, including a special defense that the plaintiff did not own the mortgage at the time the action was commenced. On March 27, 2008, the defendant also filed a motion to dismiss the action and in the memorandum of law in support thereof stated that the note submitted in support of the motion for summary judgment contained no endorsement and no date.

Although our review of the file demonstrates that the copy of the note submitted with the motion for summary judgment does not contain an endorsement and is not dated, the defendant has not claimed on appeal that Judge Dunnell improperly granted the plaintiff’s motion for summary judgment.[8] Rather, the defendant attacks Judge Domnarski’s reliance on Judge Dunnell’s ruling on the motion for summary judgment. The substance of the defendant’s appellate claim is that the mortgage was not assigned to the plaintiff until sometime after the action was commenced, and the plaintiff did not own the note at the time it commenced the action.[9] The defendant, however, cannot rely on the date the mortgage was assigned to the plaintiff as proof that the plaintiff did not own the note on the date the action was commenced.

“General Statutes § 49-17 permits the holder of a negotiable instrument that is secured by a mortgage to foreclose on the mortgage even when the mortgage has not yet been assigned to him. . . . The statute codifies the common-law principle of long standing that the mortgage follows the note, pursuant to which only the rightful owner of the note has the right to enforce the mortgage. . . . Our legislature, by adopting § 49-17, has provide[d] an avenue for the holder of the note to foreclose on the property when the mortgage has not been assigned to him.” (Citations omitted; internal quotation marks omitted.) Chase Home Finance, LLC v. Fequiere, 119 Conn. App. 570, 576-77, 989 A.2d 606, cert. denied, 295 Conn. 922, 991 A.2d 564 (2010).

The key to resolving the defendant’s claim is a determination of when the note came into the plaintiff’s possession. We cannot review the claim because Judge Domnarski made no factual finding as to when the plaintiff acquired the note. Without that factual determination, we are unable to say whether Judge Domnarski improperly denied the defendant’s motion to dismiss.[10] Although it is the appellant’s responsibility to provide an adequate record for review; see Practice Book §§ 60-5 and 61-10; that cannot be the end of the matter because it concerns the trial court’s subject matter jurisdiction.

“[S]ubject matter jurisdiction involves the authority of the court to adjudicate the type of controversy presented by the action before it . . . and a judgment rendered without subject matter jurisdiction is void. . . . Further, it is well established that a reviewing court properly may address jurisdictional claims that neither were raised nor ruled on in the trial court. . . . Indeed, [o]nce the question of lack of jurisdiction of a court is raised, [it] must be disposed of no matter in what form it is presented. . . . The court must fully resolve it before proceeding further with the case.” (Internal quotation marks omitted.) In re DeLeon J., 290 Conn. 371, 376, 963 A.2d 53 (2009). The burden of demonstrating that a party has standing to bring an action is on the plaintiff. Seymour v. Region One Board of Education, 274 Conn. 92, 104, 874 A.2d 742, cert. denied, 546 U.S. 1016, 126 S. Ct. 659, 163 L. Ed. 2d 526 (2005).

“Trial courts addressing motions to dismiss for lack of subject matter jurisdiction pursuant to [Practice Book] § 10-31 (a) (1) may encounter different situations, depending on the status of the record in the case. As summarized by a federal court discussing motions brought pursuant to the analogous federal rule [i.e., Fed. R. Civ. P. (12) (b) (1)], [l]ack of subject matter jurisdiction may be found in any one of three instances: (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court’s resolution of disputed facts. . . . Different rules and procedures will apply, depending on the state of the record at the time the motion is filed.” (Internal quotation marks omitted.) Conboy v. State, 292 Conn. 642, 650-51, 974 A.2d 669 (2009).

“[I]f the complaint is supplemented by undisputed facts established by affidavits submitted in support of the motions to dismiss . . . the trial court, in determining the jurisdictional issue, may consider these supplementary undisputed facts and need not conclusively presume the validity of the allegations of the complaint.. . . [W]here a jurisdictional determination is dependent on the resolution of a critical factual dispute, it cannot be decided on a motion to dismiss in the absence of an evidentiary hearing to establish jurisdictional facts.” (Citations omitted; emphasis in original; internal quotation marks omitted.) Id., 651-52.

In this case, the defendant questioned the plaintiff’s standing to bring the foreclosure action at the time the action was commenced. The defendant’s motion to dismiss was inspired by the exhibits attached to the plaintiff’s motion for summary judgment. The affidavit of Peter Read, an assistant vice president of Washington Mutual Bank, attests to the plaintiff being the holder of the note, but it does not resolve the factual issue as to when the plaintiff acquired the note.[11] See footnote 3 of this opinion. When the question regarding the plaintiff’s standing was raised, the court should have held a hearing to determine whether the plaintiff was the owner or holder of the note at the time the action was commenced. See Conboy v. State, supra, 292 Conn. 651-52. It is fundamental that appellate courts do not make findings of fact. Stevenson v. Commissioner of Correction, 112 Conn. App. 675, 683 n.1, 963 A.2d 1077 (when record on appeal devoid of factual findings, improper for appellate court to make its own findings), cert. denied, 291 Conn. 904, 967 A.2d 1221 (2009). The case, therefore, must be remanded to the trial court for a hearing to determine whether the plaintiff was the owner or holder of the subject note at the time the action was commenced. See Cross v. Hudon, 27 Conn. App. 729, 734, 609 A.2d 1021 (1992) (court improperly failed to conduct evidentiary hearing because jurisdiction hinged on factual determination).

The judgment is reversed and the case is remanded for a hearing on the motion to dismiss.

In this opinion the other judges concurred.

[*] The listing of judges reflects their seniority status on this court as of the date of oral argument.

[1] The plaintiff is Deutsche Bank National Trust Company as trustee for Long Beach Mortgage Loan Trust 2006-3.

[2] In his answer, the pro se defendant admitted that he owned the property at 254 Slater Road in New Britain and that on February 28, 2006, he executed and delivered to Long Beach Mortgage Company a note for a loan in the principal amount of $220,000. He also admitted that he is the owner of the equity of redemption in the property and is in possession of the property. The defendant left the plaintiff to its proof as to the remaining allegations of the complaint.

[3] Our review of the file demonstrates that the plaintiff attached copies of the following documents as exhibits to its motion for summary judgment: the defendant’s answer, an affidavit signed by Peter Read, an assistant vice president of Washington Mutual Bank, the subject fixed-adjustable rate note—payable to Long Beach Mortgage Company without an endorsement, the subject mortgage, the assignment of the mortgage and the notice of intent to accelerate.

In his affidavit, Read attested, among other things, as to the plaintiff’s ownership of the mortgage and note as follows: “Said mortgage was thereafter assigned to Deutsche Bank National Trust Company, as Trustee for Long Beach Mortgage Loan Trust 2006-3 by virtue of an assignment of mortgage recorded in Volume 1725 at Page 1024 of the New Britain Land Records. A true and accurate copy of said assignment is attached hereto as Exhibit C. Plaintiff in this action, Deutsche Bank National Trust Company, as Trustee for Long Beach Mortgage Loan Trust 2006-3, is the owner and holder of said note and mortgage.” Significantly, Read does not attest in the affidavit to the date the plaintiff acquired the note.

[4] The defendant did not file a motion asking Judge Dunnell to articulate the basis on which she made the factual determination that there were no genuine issues of material fact and that the plaintiff was entitled to judgment as a matter of law; see Practice Book § 17-49; including the issue of the ownership of the note and mortgage and to whom the defendant was liable.

[5] The defendant proposed two special defenses. His first special defense is that the plaintiff did not own the mortgage at the time the action was commenced and his second special defense is that Washington Mutual Bank mailed the notice of intent to accelerate to the defendant but had no authority to do so as Long Beach Mortgage Company owned the mortgage at the time.

[6] According to the record, the court never ruled on the motion for permission to amend and the objection thereto.

[7] In its brief, the plaintiff argues that the defendant failed to preserve the issue presented or timely file his appeal because the appeal was not filed within twenty days of the date the trial court denied the motion to dismiss. Generally, the denial of a motion to dismiss is an interlocutory ruling. Conboy v. State, 292 Conn. 642, 645 n.5, 974 A.2d 669 (2009); but see Ware v. State, 118 Conn. App. 65, 79, 983 A.2d 853 (2009) (denial of motion to dismiss based on colorable claim of sovereign immunity immediately appealable). The defendant timely filed his appeal within twenty days of the court rendering the judgment of foreclosure by sale. See Glenfed Mortgage Corp. v. Crowley, 61 Conn. App. 84, 88, 763 A.2d 19 (2000) (foreclosure by sale appealable final judgment).

[8] Even if the defendant had claimed that Judge Dunnell improperly granted the motion for summary judgment, there is no record that Judge Dunnell found that there is no genuine issue of material fact that the plaintiff became the owner of the note prior to the commencement of the action.

[9] The defendant also notes correctly that the copy of the note attached to the motion for summary judgment lacked an endorsement. We have no way of knowing if Judge Dunnell inquired about that before ruling on the motion for summary judgment. In its brief to this court, the plaintiff states that the “original Note bearing endorsement was produced to the trial court at the hearing on April 21, 2008.” On April 21, 2008, judgment was rendered. It was not the date on which the plaintiff’s motion for summary judgment was decided. Moreover, the endorsement is not proof of the date on which the plaintiff acquired the note.

[10] The defendant did not file any exhibits or transcripts of proceedings in the trial court, if any. We do not know whether any evidence other than the attachments to the plaintiff’s motion for summary judgment were presented to either court at the time the motion for summary judgment and the motion to dismiss were decided. The defendant has not claimed that the plaintiff submitted insufficient evidence to determine its ownership of the note.

[11] On appeal, the plaintiff has argued, supported by citations to authority, that the holder of a note rightly may foreclose the mortgage. That argument, however, is beside the point. The relevant question is when the plaintiff became the holder.

___________________________________________________________


LASALLE BANK, NATIONAL ASSOCIAT-ION (TRUSTEE),
v.
PAUL S. BIALOBRZESKI ET AL.

(AC 30911).

Appellate Court of Connecticut.
Argued January 13, 2010.
Officially released September 21, 2010.

Paul S. Bialobrzeski, pro se, the appellant (defendant).

Andrew P. Barsom, for the appellee (plaintiff).

Flynn, C. J., and Bishop and Robinson, Js.[*]

Opinion

ROBINSON, J.

The pro se defendant Paul S. Bialobrzeski[1] appeals from the judgment of strict foreclosure rendered in favor of the plaintiff, LaSalle Bank, National Association, as trustee for WMABS Series 2006-HE[2] Trust.2 On appeal, the defendant claims that it was improper for the trial court to deny his motion to dismiss the action because the plaintiff lacked standing. Because the record is devoid of a factual finding as to when the plaintiff acquired the note, we are unable to review the claim as to the court’s subject matter jurisdiction. See Practice Book §§ 60-5 and 61-10. We, therefore, reverse the judgment of the trial court and remand the case for further proceedings.

The following procedural history is relevant to the defendant’s appeal. On October 29, 2007, the plaintiff caused a writ of summons and complaint to be served on the defendant to foreclose the mortgage on real property at 121 Colonial Avenue in Middlebury. The defendant filed a pro se appearance on November 16, 2007. On December 14, 2007, the defendant filed an answer to the complaint in which he admitted that (1) he owned the real property at 121 Colonial Avenue in Middlebury, (2) on March 16, 2006, he executed and delivered to Long Beach Mortgage Corporation a note in the original principal amount of $350,000, and (3) he was the owner of the equity of redemption in the property and was in possession of the property. As to the remaining counts of the complaint, the defendant left the plaintiff to its proof. On that same date, the defendant filed a motion for a continuance in order to retain counsel to defend against the motion for a judgment of strict foreclosure that had been filed by the plaintiff.

On January 24, 2008, the plaintiff filed a motion for summary judgment as to the defendant’s liability and attached his answer; an affidavit of Peter Read, an assistant vice president of Washington Mutual Bank, attesting that the plaintiff was the owner of the note and mortgage,[3] and that the debt was in default and the balance due; and copies of the note,[4] mortgage, assignment of the mortgage[5] and notice of intent to accelerate. The court granted the motion for summary judgment as to liability on February 11, 2008, noting that the motion had been unopposed.[6] Thereafter the defendant retained counsel, who filed a motion for permission to amend the defendant’s answer and to allege special defenses. The first proposed special defense alleged that the assignment of the mortgage from Long Beach Mortgage Company to LaSalle Bank was executed subsequent to the commencement of the action. The second proposed special defense alleged that Washington Mutual Bank allegedly mailed a notice of intent to accelerate to the defendant on May 6, 2007, and on that date the owner of the note and mortgage was Long Beach Mortgage Company and that Washington Mutual Bank lacked authority to act on behalf of Long Beach Mortgage Company. Moreover, the defendant alleged that the notice of intent to accelerate was void and the plaintiff is not entitled to a judgment of foreclosure.[7] The plaintiff objected to the defendant’s motion for permission to amend his answer and to file special defenses.[8]

On March 20, 2008, the defendant filed a motion to dismiss the action. In his memorandum of law in support of his motion to dismiss, the defendant stated that the action was filed on November 1, 2007, but the subject mortgage was assigned to the plaintiff on November 27, 2007, and therefore the plaintiff was not the owner of the mortgage on the date the action was commenced and lacked standing to bring it. The plaintiff objected to the motion to dismiss and argued that it was in possession of the subject note and mortgage at the time the action was commenced and that the court could take notice of the endorsement of the note by Long Beach Mortgage Company.[9] The plaintiff also cited General Statutes § 49-17 for the proposition that the statute provides an avenue for the holder of a note to obtain a judgment of foreclosure on the accompanying mortgage deed even if it had not been or never was formally assigned. On March 31, 2008, the defendant filed a supplemental memorandum of law in support of his motion to dismiss in which he contended that the burden was on the plaintiff to demonstrate that it possessed the note on the date the action was commenced and that the operation of § 49-17 does not provide proof of when the plaintiff came into possession of the note.[10]

On January 5, 2009, the court sustained the plaintiff’s objection to the motion to dismiss stating that “[t]he issue is moot, as the court has already ruled on the summary judgment motion.”[11] On March 2, 2009, the court rendered judgment of strict foreclosure and set the law day as July 28, 2009. The defendant appealed, claiming that it was improper for the court to deny his motion to dismiss because the plaintiff did not own either the note or the mortgage at the time it commenced the action and, thus, lacked standing, thereby depriving the court of subject matter jurisdiction.[12]

The standard of review applicable to a motion to dismiss is well established. “A motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court. . . . [O]ur review of the trial court’s ultimate legal conclusion and resulting [denial] of the motion to dismiss will be de novo. . . . Factual findings underlying the court’s decision, however, will not be disturbed unless they are clearly erroneous. . . . The applicable standard of review for the denial of a motion to dismiss, therefore, generally turns on whether the appellant seeks to challenge the legal conclusions of the trial court or its factual determinations.” (Citations omitted; internal quotation marks omitted.) State v. Bonner, 290 Conn. 468, 477-78, 964 A.2d 73 (2009).

We first look to the relevant allegations of the plaintiff’s complaint. At paragraph 4, the plaintiff alleged, in part: “The [p]laintiff, LaSalle Bank, National Association as trustee for WMABS Series 2006-HE2 Trust, is the holder of said Note and Mortgage.” In answering the complaint, the defendant left the plaintiff to its proof as to that allegation. When the plaintiff filed its motion for summary judgment on January 24, 2008, it attached copies of the subject note and mortgage and an assignment of the mortgage. At the time the court granted the motion for summary judgment as to liability, it noted that the motion had been unopposed. The defendant did not file a motion for reargument but sought to amend his answer to include a special defense that the plaintiff did not own the mortgage at the time the action was commenced. The defendant also filed a motion to dismiss the action.

Although our review of the file demonstrates that the copy of the note submitted with the motion for summary judgment does not contain a dated endorsement, the defendant has not claimed on appeal that the court improperly granted the plaintiff’s motion for summary judgment.[13] Rather, the defendant challenges the court’s denial of his motion to dismiss. The substance of the defendant’s appellate claim is that the plaintiff did not own the note at the time it commenced the action, and the mortgage was not assigned to the plaintiff until sometime after the action was commenced. The defendant, however, cannot rely on the date the mortgage was assigned to the plaintiff as proof that the plaintiff did not own the note on the date the action was commenced.

“[Section] § 49-17 permits the holder of a negotiable instrument that is secured by a mortgage to foreclose on the mortgage even when the mortgage has not yet been assigned to him. . . . The statute codifies the common-law principle of long standing that the mortgage follows the note, pursuant to which only the rightful owner of the note has the right to enforce the mortgage. . . . Our legislature, by adopting § 49-17, has provide[d] an avenue for the holder of the note to foreclose on the property when the mortgage has not been assigned to him.” (Citations omitted; internal quotation marks omitted.) Chase Home Finance, LLC v. Fequiere, 119 Conn. App. 570, 576-77, 989 A.2d 606, cert. denied, 295 Conn. 922, 991 A.2d 564 (2010).

The key to resolving the defendant’s claim is a determination of when the note came into the plaintiff’s possession. We cannot review this claim because the court made no factual finding as to when the plaintiff acquired the note. Without that factual determination, we are unable to say whether the court improperly denied the defendant’s motion to dismiss.[14] Although the defendant did not file a motion asking the court to articulate its reason for denying the motion to dismiss, that cannot be the end of the matter because it concerns the trial court’s subject matter jurisdiction.

“[S]ubject matter jurisdiction involves the authority of the court to adjudicate the type of controversy presented by the action before it . . . and a judgment rendered without subject matter jurisdiction is void. . . . Further, it is well established that a reviewing court properly may address jurisdictional claims that neither were raised nor ruled on in the trial court. . . . Indeed, [o]nce the question of lack of jurisdiction of a court is raised, [it] must be disposed of no matter in what form it is presented. . . . The court must fully resolve it before proceeding further with the case.” (Internal quotation marks omitted.) In re DeLeon J., 290 Conn. 371, 376, 963 A.2d 53 (2009). The burden of demonstrating that a party has standing to bring an action is on the plaintiff. Seymour v. Region One Board of Education, 274 Conn. 92, 104, 874 A.2d 742, cert. denied, 546 U.S. 1016, 126 S. Ct. 659, 163 L. Ed. 2d 526 (2005).

“Trial courts addressing motions to dismiss for lack of subject matter jurisdiction pursuant to [Practice Book] § 10-31 (a) (1) may encounter different situations, depending on the status of the record in the case. As summarized by a federal court discussing motions brought pursuant to the analogous federal rule [i.e., Fed. R. Civ. P. (12) (b) (1)], [l]ack of subject matter jurisdiction may be found in any one of three instances: (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court’s resolution of disputed facts. . . . Different rules and procedures will apply, depending on the state of the record at the time the motion is filed.” (Internal quotation marks omitted.) Conboy v. State, 292 Conn. 642, 650-51, 974 A.2d 669 (2009).

“[I]f the complaint is supplemented by undisputed facts established by affidavits submitted in support of the motions to dismiss . . . the trial court, in determining the jurisdictional issue, may consider these supplementary undisputed facts and need not conclusively presume the validity of the allegations of the complaint.. . . [W]here a jurisdictional determination is dependent on the resolution of a critical factual dispute, it cannot be decided on a motion to dismiss in the absence of an evidentiary hearing to establish jurisdictional facts.” (Citations omitted; emphasis in original; internal quotation marks omitted.) Id., 651-52.

In this case, the defendant questioned the plaintiff’s standing to bring the foreclosure action when it was commenced. The defendant’s motion to dismiss was inspired by the exhibits the plaintiff attached to its motion for summary judgment. Read’s affidavit attests to the plaintiff being the holder of the note, but it does not resolve the factual issue as to when the plaintiff acquired the note.[15] When the question regarding the plaintiff’s standing was raised, the court should have held a hearing to determine whether the plaintiff was the owner or holder of the note at the time the action was commenced. It is fundamental that appellate courts do not make findings of fact. Stevenson v. Commissioner of Correction, 112 Conn. App. 675, 683 n.1, 963 A.2d 1077 (when record on appeal devoid of factual findings, improper for appellate court to make its own findings), cert. denied, 291 Conn. 904, 967 A.2d 1221 (2009). The case, therefore, must be remanded to the trial court for a hearing to determine whether the plaintiff was the owner or holder of the subject note at the time the action was commenced. See Cross v. Hudon, 27 Conn. App. 729, 734, 609 A.2d 1021 (1992) (court improperly failed to conduct evidentiary hearing because jurisdiction hinged on factual determination).

The judgment is reversed and the case is remanded for a hearing on the motion to dismiss.

In this opinion the other judges concurred.

[*] The listing of judges reflects their seniority status on this court as of the date of oral argument.

[1] At trial, Robert Fishman, trustee for C & F Associates #2, also was a defendant, but he is not a party to this appeal. In this opinion, we refer to Bialobrzeski as the defendant.

[2] On March 2, 2009, the court granted the plaintiff’s motion to substitute LaSalle Bank NA as trustee for Washington Mutual Asset-Backed Certificates WMABS Series 2006-HE2 Trust as the plaintiff. We will refer to the plaintiff and the substitute plaintiff as the plaintiff for purposes of this opinion.

[3] Significantly, Read did not attest as to the date the plaintiff acquired the note.

[4] The copy of the note attached to the motion for summary judgment indicates that the debt is payable to Long Beach Mortgage Company and contains no endorsement. We note that in his answer to the complaint the defendant indicated that the note was held by Long Beach Mortgage Corporation.

[5] The assignment of mortgage attached to the motion for summary judgment states that Long Beach Mortgage Company assigned the mortgage to LaSalle Bank, National Association as Trustee for WMABS Series 2006-HE2 Trust on November 27, 2007.

[6] The defendant filed an objection to the motion for summary judgment on March 20, 2008. In his objection, the defendant stated that the assignment of the mortgage was dated twenty-seven days after the foreclosure action was commenced and therefore the plaintiff did not own the mortgage when the action was served. He attached a copy of the assignment of the mortgage to the objection to the motion for summary judgment.

[7] Copies of the assignment of the mortgage and the notice of intent to accelerate were attached to the proposed amended answer and special defenses.

[8] It appears that no action was taken on the defendant’s motion for permission to amend his answer and the objection thereto.

[9] No note or endorsement was attached to the plaintiff’s objection.

[10] The defendant attempted to file a request for production that complied with the rules of practice to obtain evidence that the plaintiff possessed the subject note on the date the action was commenced. The court agreed with the plaintiff that there was “no valid discovery request for the court to determine if it has been complied with by the plaintiff.”

[11] It is not clear to us how the motion to dismiss could have been moot, as subject matter jurisdiction may be raised at any time and the court must address the issue before it may proceed with the case. See, e.g., O’Donnell v. Waterbury, 111 Conn. App. 1, 5, 959 A.2d 163, cert. denied, 289 Conn. 959, 961 A.2d 422 (2008).

[12] In its brief, the plaintiff argues that the defendant failed to preserve the issue presented or timely file his appeal because the appeal was not filed within twenty days of the date the court denied the motion to dismiss. Generally, the denial of a motion to dismiss is an interlocutory ruling, which is not an appealable final judgment. Conboy v. State, 292 Conn. 642, 645 n.5, 974 A.2d 669 (2009); but see Ware v. State, 118 Conn. App. 65, 79, 983 A.2d 853 (2009) (denial of motion to dismiss based on colorable claim of sovereign immunity immediately appealable). The defendant timely filed his appeal within twenty days of the court’s rendering the judgment of strict foreclosure. See Glenfed Mortgage Corp. v. Crowley, 61 Conn. App. 84, 88, 763 A.2d 19 (2000) (foreclosure appealable final judgment).

[13] Even if the defendant had claimed that the court improperly granted the motion for summary judgment, there is no record as to the basis of the court’s finding that there were no genuine issues of material fact, including the date the subject note was endorsed to the plaintiff and that the plaintiff owned the note prior to the commencement of the foreclosure action. The defendant did not file a motion for articulation. See Practice Book § 66-5.

[14] The defendant did not file any exhibits or transcripts of the proceedings in the trial court, if any. We do not know whether there was evidence in addition to the exhibits attached to the motion for summary judgment presented to the court at the time it considered the motion for summary judgment and the motion to dismiss. The defendant has not claimed that the plaintiff submitted insufficient evidence to determine its ownership of the note.

[15] On appeal, the plaintiff has argued, supported by citations to authority, that the holder of a note rightly may foreclose the mortgage. That argument, however, is beside the point. The relevant question is when the plaintiff became the holder of the subject note.

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Colorado Couples Face Foreclosure Obstacles, One Has NO Mortgage, Another Has 3 Lenders Claiming Same Note

Colorado Couples Face Foreclosure Obstacles, One Has NO Mortgage, Another Has 3 Lenders Claiming Same Note


Foreclosure paperwork miscues piling up

.


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Posted in STOP FORECLOSURE FRAUDComments (1)

EXCLUSIVE | NYSC COMMERCIAL (CMBS), MERS and a $65 MILLION NOTE

EXCLUSIVE | NYSC COMMERCIAL (CMBS), MERS and a $65 MILLION NOTE


Recently many blogs have been discussing MERS and CMBS, well here is an example of one case from a NY Supreme Court. You can read it and draw your own conclusions by commenting down below if you wish.

Be sure you catch Judge IRA B. WARSHAWSKY’s valid points!

SUPREME COURT : STATE OF NEW YORK
COUNTY OF NASSAU

MASS OP LLC and MASS ONE LLC

against

PRINCIPAL LIFE INSURANCE COMPANY
PRINCIPAL GLOBAL INVESTORS, LLC,
WELLS FARGO BANK, N.A., CENTERLINE
CAPITAL GROUP, INC., BANK OF AMERICA
NATIONAL ASSOCIATION, Successor by
Merger to LASALLE BANK NATIONAL
ASSOCIATION, as TRUSTEE for the Registered
Holders of Bear Stearns Commercial Mortgage
Securities, Inc. Commercial Mortgage Pass-
Through Certificates Series 2006-PWR14

Excerpts:

The application stated that the lender intended to ” securitize” the loan and the borrower was to “cooperate in connection with any such securitization.” The application recited that each borrower was a “single purpose bankruptcy-remote entity…formed exclusively for the purpose of owning and operating the property.” The application stated that the loan amount would be not less than $65 million provided, among other conditions, that the loan amount would be equal to 80% of the appraised value of the property “pursuant to an appraisal approved by lender. “

However, the court hastens to add that it is not insensitive to plaintiffs ‘ predicament. Traditionally, mortgage assignments were recorded with the County Clerk. By searching the mortgage records, the mortgagor could determine the present mortgage holder and attempt to negotiate a “work out” or forbearance. In 1993, several large participants in the mortgage industry created the Mortgage Electronic Registration System (“MERS”). Pursuant to MERS, assignments of residential mortgages, instead of being publicly recorded, are tracked electronically in a private system (See MERSCORP, Inc. Romaine 8 NY3d 90 (2006)). By visiting MERS’ website or dialing its 800 number , a homeowner may access information regarding his or her loan servicer, but not the holder of the mortgage.

This lack of disclosure may create substantial difficulty when a homeowner wishes to negotiate the terms of his or her mortgage or enforce a legal right against the mortgagee and is unable to learn the mortgagee s identity (See 8 NY3d at 104, Kaye, J. dissenting). This

“information deficit” may function to “insulate a note holder from liability… and hide predatory lending practices”

(Id). The MERS system applies only to residential mortgages. However, as the present case illustrates , securitized financing creates the potential for the same abuses with commercial mortgages because of a similar “information deficit. ” While a breach of contract action against the lender does not lie, this court echoes Judge Kaye in calling the issue to the attention of the Legislature (ld). The court will now proceed to determine the sufficiency of plaintiffs ‘ fraud claims.

[ipaper docId=40293648 access_key=key-ewvrbg41h8im0oc3odn height=600 width=600 /]

Just recently:

2010 NY Slip Op 51791(U)

MASS OP LLC AND MASS ONE LLC, Plaintiffs,
v.
PRINCIPAL LIFE INSURANCE COMPANY, PRINCIPAL LIFE GLOBAL INVESTORS, LLC, WELLS FARGO BANK, N.A., CENTERLINE SERVICING, INC., BANK OF AMERICA NATIONAL ASSOCIATION, SUCCESSOR BY MERGER TO LA SALLE BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR THE REGISTERED HOLDERS OF BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES, INC. COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 2006-PWR14, BEAR STEARNS COMMERCIAL MORTGAGE SECURITIES INC., AND “JOHN DOE” NO. 1 THROUGH “JOHN DOE” #7 INCLUSIVE, THE ACTUAL IDENTITIES OF THE LAST NAMED, defendants BEING UNKNOWN TO Plaintiffs, THE PARTIES INTENDED BEING PERSONS, CORPORATIONS, ASSOCIATIONS AND OTHER ENTITIES HAVING OR CLAIMING AN INTEREST IN THE LOAN DESCRIBED IN THIS COMPLAINT, Defendants.

Supreme Court, Nassau County.

Decided September 30, 2010.

IRA B. WARSHAWSKY, J.

PRELIMINARY STATEMENT

Defendants Bear Stearns and Principal Life Insurance move to dismiss the amended complaint. Bear Stearns, which first appears as a defendant in the amended complaint, assert that by entering into a settlement agreement with certain defendants, and have thereby reaffirmed the valuation of the shopping center and have recovered damages, bars them from further claims under the “one recovery” doctrine. They also claim that the breach of fiduciary duty claim against Bear Stearns is barred by the 3-year statute of limitations, which commenced with the refinancing on November 8, 2006, with service upon Bear Stearns on December 24, 2009. Bear Stearns also contends that the plaintiff has failed to allege a “relationship of higher trust”, essential to a claimed breach of a fiduciary duty; that the claim which plaintiff asserts against Bear Stearns is barred by the Martin Act; and, to the extent a claim of “joint venture” with Bear Stearns is asserted, recovery is also barred under the “one recovery” doctrine.

In similar fashion, Principal Life contends that plaintiffs’ settlement with the servicer defendants renders the amended complaint moot; there was no fiduciary relationship between plaintiffs and Principal Life; the Pooling and Servicing Agreement did not establish a joint venture; and plaintiffs have failed to state a claim for breach of a fiduciary duty.

BACKGROUND

This action arises from the refinancing of the Phillips at Sunrise Mall in Massapequa. Plaintiff, the owner of the mall, sought to borrow $65,000,000 from Principal Life to refinance the existing $40,000,000 mortgage on the mall. Plaintiff contends that prior to the November 8, 2006 refinancing transaction, Principal Life represented that the $65,000,000 represented no more than 80% of the value of the real estate. They claim that this was erroneous, based upon a defective appraisal performed by Cushman & Wakefield, allegedly based upon faulty data. Plaintiff claims to have expressed concern about repaying the loan, but were advised that Principal Life’s servicing entity, Principal Global Investors, LLC would be responsive to the needs of plaintiff.

After the closing, Principal Life assigned the loan to Principal Commercial Funding, LLC, which then sold the loan to Bear Stearns as the “depositor” for a commercial mortgage-backed securities trust (“CMBT”). Plaintiff contended in part that the failure of Principal Life Insurance to divulge its fee arrangement with Bear Stearns, which encouraged them to inflate the amount of the mortgage, breached a duty to plaintiff. The mortgage was deposited along with many other mortgages in the securitization process. Through underwriters, commercial mortgage certificates were sold in the open market.

By December 2008, in the midst of a global economic crisis, plaintiffs had lost two major tenants, and were experiencing difficulty in making payments under the mortgage. Their efforts to modify the mortgage with Principal Global were not successful, and they were advised to contact Wells Fargo Bank, N.A., the “master servicer”. Plaintiffs contend that they were unable to make headway in such discussions with any servicer.

Plaintiffs commenced the original action on March 11, 2009, suing the maker and seller of the loan, the servicers and trustee for their roles in originating and servicing the loan. They did not sue Bear Stearns or any underwriters or other entities involved in bringing the commercial mortgage certificates to market. The complaint was dismissed by Order dated July 1, 2009, but the dismissal was without prejudice to plaintiffs’ seeking to replead to allege a breach of fiduciary duty.

Plaintiffs did so move on September 16, 2009, seeking to add Bear Stearns as a defendant. Defendant Bear Stearns notes that the moving papers included a copy of the proposed amended complaint, but not a summons, and that this is a significant factor in the claimed expiration of the statute of limitations. By Order of December 14, 2009, the Court granted plaintiffs’ motion in part and denied it in part. Plaintiff was permitted to allege a first cause of action in the Amended Complaint claiming a breach of fiduciary duty claim against Principal Life and Bear Stearns, and also permitted the assertion of a similar claim against Wells Fargo and Centerline Servicing, Inc. and Bank of America N.A. under a joint venture theory in the second cause of action. Plaintiff was also permitted to replead a cause of action against Principal Life.

On December 24, 2009 plaintiff made service of the Amended Complaint and Supplemental Summons upon Bear Stearns by service on the New York Secretary of State. By letter dated April 29, 2010 from June Diamant, Esq., Bear Stearns learned that plaintiff reached a settlement with defendants Centerline, Bank of America, Wells Fargo and Principal Global. While Bear Stearns has not seen the settlement agreement, a reading of the letter indicates that there has been no reduction in the principal amount of the loan, but interest is being deferred for some period of time.

Principal Life’s motion asserts that the only claim surviving against them after the Decision and Order of the Court and the settlement with Wells Fargo Bank, N.A. as “master servicer”, Centerline Servicing, Inc. as “special servicer”, Bank of America, N.A., and Principal Global Investors, LLC, are an alleged breach of fiduciary duty based upon its failure to reveal its compensation arrangement with Bear Stearns, and a second cause of action on the theory of a joint venture and breach of a fiduciary duty thereunder.

The Amended Complaint

The complaint alleges Five Causes of Action as follows:

First: Principal assigned an appraised value which would be relied upon by plaintiff to determine the amount of debt which they could safely assume. Principal and Bear Stearns, possessing superior knowledge and expertise than plaintiff in originating loans and issuing debt, placed the loan in a securitized pool. The undisclosed compensation agreements between Principal and Bear Stearns incentivized Principal to originate the loan and Bear Stearns to deposit it into the CMBS trust. The failure of Principal and Bear Stearns to advise plaintiff of the fee arrangement constituted a breach of fiduciary duty.

Second: Wells Fargo, Bank America and Centerline, as trustees and servicers of the loan, acted as joint venturers with Principal and Bear Stearns. In this capacity they owed a fiduciary duty to plaintiffs, which they breached.

Third: Principal failed to disclose the methodology by which it valued the property at an inflated price so as to benefit from undisclosed compensation agreements with Bear Stearns. Had plaintiffs been aware of the profit motive which caused Principal to misrepresent the value of the property, they would not have committed to the mortgage. Plaintiff seeks a reformation of the Loan by reducing the principal to 80% of the fair market value and a prohibition against defendants or other owner of the loan from declaring plaintiffs in default.

Fourth: In order to induce plaintiff to agree to the loan Principal made fraudulent misrepresentations of a material fact, that is, that the servicers would be responsive to plaintiff at a time when Principal knew that the loan would be transferred to others who would refuse to communicate with plaintiff, and whose preference was to have the loan go into default rather than resolve issues so as to maintain it as a performing loan.

Fifth: Despite the provision in the mortgage that communications to the lender were to be directed to Principal, neither Principal nor any other defendant notified plaintiff that the contact had been changed, resulting in a lack of communication from Principal in response to contacts from plaintiff. Principal’s servicing arm, Global, advised that communications must be directed to the Master Servicer, yet neither the Master Servicer nor any of the other defendants were willing to respond or carry out the obligations of the lender/mortgagee, although holding the powers of the mortgagee. Defendants thereby breached their obligations under the Mortgage Agreement and Loan Documents by failing to exercise the discretion granted in the Mortgage Agreement in a reasonable manner.

Plaintiffs demand damages of $28,000,000 on the First, Second, Fourth and Fifth Causes of Action, and reformation of the Mortgage in the Third Cause of Action.Plaintiffs oppose the motions of Bear Stearns and Principal, in part asserting that by virtue of the prior Order of the Court, after review of the proposed amended complaint, the Court directed an answer as opposed to a further motion to dismiss. They also contend that the prior settlement with servicer-defendants does not render the matter moot, that the claims against Bear Stearns are not time-barred, that the breach of fiduciary duty claim is sufficiently pleaded, the information that the moving defendants failed to disclose is material, that the action is not barred by the Martin Act, and that the breach of fiduciary claim is adequately pleaded against Bear Stearns on the theory of joint venture liability. Plaintiff asserts the same claims with respect to defendant Principal.

DISCUSSION

Defendants Principal and Bear Stearns move for dismiss pursuant to Civil Practice Law and Rules §§ 3211 (a)(1) and 3211 (a)(7).

CPLR § 3211 (a)(1) provides as follows:

(a) Motion to dismiss cause of action. A party may move for judgment dismissing one or more causes of action asserted against him on the ground that: 1. a defense is founded upon documentary evidence;

In order to succeed in a claim based upon documentary evidence, “. . . the defendant must establish that the documentary evidence which forms the basis of the defense be such that it resolves all factual issues as a matter of law and conclusively disposes of the plaintiff’s claim”. (Symbol Technologies, Inc. v. Deloitte & Touche, LLP, 69 AD3d 191, 194 [2d Dept. 2009]); (DiGiacomo v. Levine, 2010 WL 3583424 (N.Y.AD2d Dept.]).

When determining a motion to dismiss for failure to state cause of action pursuant to Civil Practice Law and Rules § 3211 (a)(7), the pleadings must be afforded a liberal construction, facts as alleged in the complaint are accepted as true, and the plaintiff is accorded the benefit of every favorable inference, and the court must determine only whether the facts as alleged fit within any cognizable legal theory. (Uzzle v. Nunzie Court Homeowners Ass’,. Inc. 55 AD3d 723[2d Dept. 2008]). A pleading will not be dismissed for insufficiency merely because it is inartistically drawn; rather, such pleading is deemed to allege whatever can be implied from its statements by fair and reasonable intendment; the question is whether the requisite allegations of any valid cause of action cognizable by the state courts can be fairly gathered from all the averments. (Brinkley v. Casablancas, 80 AD2d 815 [1st Dept. 1981]).

Defendants contention with respect to § 3211 (a)(1) is, in part, that the settlement agreement with servicing defendants belies the claims that the appraised value was inflated, or the interest rate too high. Aside from the fact that the Court has not seen the settlement agreement, defendants argument presumes that plaintiffs had the opportunity to reduce the principal balance or interest rate in conjunction with their settlement negotiations, and that their failure to do so is an acknowledgment on their part that the loan was not based upon an inflated appraisal and that the interest rate was appropriate. Instead, the settlement merely provided for a deferral of interest payments for some period of time in an effort to allow plaintiff to recover from the loss of two anchor tenants.

The Mortgage Consolidation, Extension and Modification Agreement between Mass Op, LLC and Mass One, LLC, as borrower, and Principal Life Insurance as lender, provides at ¶ 6.1 as follows:

The relationship between Borrower and Lender is solely that of debtor and creditor, and Lender has no fiduciary or other special relationship with Borrower and no term or condition of any of the Note, this Security Instrument and the other Loan Documents shall be construed so as to deem the relationship between Borrower and Lender to be other than that of debtor and creditor. Borrower is not relying on Lender’s expertise, business acumen or advice in connection with the Property”.

This is documentary evidence which clearly refutes any claim that plaintiff relied upon the expertise of Principal and was thereby in a relationship which required a higher level of trust than that between debtor and creditor. New York Courts have been reluctant to find a fiduciary relationship between lenders and borrowers, and the language of the security agreement simply amplifies this position. (Dobroshi v. Bank of America, N.A., 65 AD3d 882, 884 [1st Dept.2009]). There have been relatively rare circumstances in which a fiduciary relationship between a lender and a borrower has been found, but these inevitably involved certain unique circumstances, as when the Court concluded that the underlying motivation for a lender was to drive the borrower out of business. (In re Monahan Ford Corp. of Flushing, 340 B.R. 1 [Bankr. E.D.NY 2006]).

In the absence of such special circumstances, plaintiff did not have a fiduciary relationship with Principal. Principal’s motion to dismiss the First Cause of Action for Breach of Fiduciary Duty is granted.

The motion by Bear Stearns to dismiss is also granted as to the First Cause of Action. Plaintiff has no contractual relationship with Bear Stearns, and certainly no fiduciary responsibility on the part of Bear Stearns to advise plaintiff of its financial arrangement with Principal.

The Second Cause of Action is directed as the servicing defendants, claiming that they were joint venturers with Principal and Bear Stearns in that they divided responsibilities and compensation with respect to the loan, all without the knowledge of plaintiff. As such joint venturers, they all owed a fiduciary responsibility to plaintiff. As noted, however, neither Principal or Bear Stearns were in a fiduciary relationship with plaintiff, and, even if the subsequent servicing defendants were part of a joint venture, they did not assume a fiduciary responsibility from their assignors, who had none.

The Second Cause of Action is dismissed for failure to state a cause of action.

The Third Cause of Action seeks a reformation of the loan agreement based upon Principal’s failure to reveal to plaintiff the methodology by which the value of $82,000,000 was arrived at or its financial arrangement with Bear Stearns. In the absence of a fiduciary relationship, Principal had no obligation to reveal the methodology by which it estimated the value of the property; nor was it obligated to reveal its financial arrangement with Bear Stearns.

In fact, plaintiffs seem to have been fully apprised of the Cushman Wakefield appraisal, which is what formed the basis for Principal’s determination that the loan did not exceed 80% of the value of the property. The proposed terms of loan, described as an “application”, made it clear that the loan amount represented 80% of the appraised value pursuant to an appraisal approved by the Lender. Principal’s motion to dismiss the Third Cause of Action is granted.

The Fourth Cause of Action alleges fraud and fraudulent misrepresentation against Principal. In order to sustain a cause of action for actual fraud, plaintiff must prove:

• defendant made a representation, as to a material fact;

• the representation was false;

• the representation was known to be false by defendant;

• it was made to induce the other party to rely upon it;

• the other party rightfully relied upon the representation;

• the party relying upon the representation was ignorant of its falsity;

• the party suffered injury or damage based on its reliance. (Otto Roth & Co. Inc., v. Gourmet Pasta, Inc. 277 AD2d 293 [2d Dept. 2000]).

The Fourth Cause of Action in the Amended Complaint adds nothing to the claim of fraud which was previously dismissed. This is the law of the case, and the motion by Principal to dismiss the Fourth Cause of Action is granted.

In its earlier decision the Court determined that representations with respect to the servicer being “extraordinarily accessible in servicing the loan”, made to sophisticated investors, was a matter of puffery, not a representation of a material fact upon which plaintiffs were entitled to rely.

The Fifth Cause of Action alleges a breach of contract in that Principal is identified as the party to be contacted by mortgagor with respect to the mortgage; but after the securitization, neither Principal nor any other defendant advised Principal of the identity of the party with whom to make contact with respect to the mortgage. If there is any obligation on the part of Principal to advise the mortgagor of the identity of a special or master servicer, it would have to be contained in the only agreements between them, the Consolidation, Modification and Extension Agreement of November 8, 2006, and the Note and Mortgage executed in conformity with the Agreement.

The Consolidation Agreement is silent on the subject. The note in the amount of $65,000,000 calls for the payment to the order of Principal Life Insurance Company, at 711 High Street, Des Moines, Iowa 50392 (“Lender”) or at such other place as the holder hereof may from time to time designate, in writing, . . .”. This gives the lender the right to direct payment to the order of another, or to a different location, but places no obligation upon it to do so. To the contrary, ¶ 12 of the Promissory Note, Exh. “G” to the Affirmation of Joshua A. Zielinski, provides as follows:

(a) Upon the transfer of this Note, Borrower hereby waiving notice of any such transfer, Lender may deliver all the collateral mortgaged, granted, pledged or assigned pursuant to the Security Instrument and the other Loan Documents, or any part thereof, to the transferee who shall thereupon become vested with all the rights herein or under applicable law given to Lender with respect thereto, and Lender shall thereafter forever be relieved and fully discharged from any liability or responsibility in the matter accruing after said transfer; but Lender shall retain all rights hereby given to it with respect to any liabilities and the collateral not so transferred.

Lender, Principal Life, transferred the Note, notice of which Borrower (plaintiffs) waived, and upon such transfer of the Note and collateral, Lender was absolved from all further liability in the matter. (Exh. “K” to Affirmation of Joshua A. Zielinski).

The Fifth Cause of Action, as set forth in the Amended Complaint, is dismissed.

In light of the foregoing determinations as to each of the causes of action, the Court finds it unnecessary to address the claims of Bear Stearns that the failure of the plaintiff to annex a Supplemental Summons to their motion to amend the complaint caused service to be beyond the three year statute of limitations, that the claim is barred by the Martin Act, and that recovery is barred by the “one recovery” doctrine.

This constitutes the Decision and Order of the Court.

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Posted in STOP FORECLOSURE FRAUDComments (1)

NJ CLASS ACTION: Beals v. Bank of America, BAC, LaSalles

NJ CLASS ACTION: Beals v. Bank of America, BAC, LaSalles


UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

Tanya Beals, on behalf of herself and all
other persons similarly situated

VS.

Bank of America, N.A, BAC Home Loans
Servicing, L.P., a wholly owned subsidiary
of Bank of America, N.A., LaSalle Bank,
N.A., John Does 1-10

Excerpts:

Defendants Have Consistently Demonstrated a Willful Disregard
for the Procedural Safeguards Entitled to All Borrowers

Defendants Routinely Act in Bad Faith and in Breach of Contractual
Obligations During the Course of their Settlement Negotiations with Plaintiffs

FIRST COUNT
(Fraud)

SECOND COUNT
(Violation of the New Jersey Consumer Fraud Act
codified at N.J.S.A. §§ 56.8-1, et. seq.(NJCFA))

THIRD COUNT
(Breach of Contract)

FOURTH COUNT
(Breach of the Covenant of Good Faith and Fair Dealing)

FIFTH COUNT
(BREACH OF IMPLIED CONTRACT)

SIXTH COUNT
(Quantum Meruit)

SEVENTH COUNT
(Violation of the New Jersey Fair Foreclosure Act)

[ipaper docId=40043122 access_key=key-sxo1jhcdyw2v12wo6tc height=600 width=600 /]

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Posted in STOP FORECLOSURE FRAUDComments (7)

[NYSC] MERS HAS NO INTEREST, STANDING, OFFICER AFFIDAVIT HAS NO PROVATIVE VALUE

[NYSC] MERS HAS NO INTEREST, STANDING, OFFICER AFFIDAVIT HAS NO PROVATIVE VALUE


SUPREME COURT – STATE OF NEW YORK

IAS PART 6 – SUFFOLK COUNTY

P R E S E N T :
Hon. RALPH. T. GAZZILLO
Justice of the Supreme Court

MORTGAGE ELECTRONIC REGISTRATION
SYSTEMS, INC.
c/ 0 Wells Fargo Bank, NA
3470 Stateview Boulevard
Ft, Mill, SC 2971 5

v.

THOMAS STANDFORD, UNITED STATES
OF AMERICA ACTING THROUGH THE IRS

EXCERPT:

Based up0n the submissions herein, it appears that plaintiff “MERS” had no standing to
commence the present action as it was not the owner of the mortgage and note when the action was
commenced.
As of January 28,2005, “MERS” had already relinquished its interest in the note and
mortgage and at no subsequent lime did it regain an interest in the subject mortgage and note. In
addition, the affidavit of merit that is attached in support of the moving papers as Exhibit C, was
executed b) “Certifying Officer” Carolyn Brown of “MERS” on February 13,2009. “MERS” had no
demonstrable interest or standing
in this matter on Feb.l3,2009 and, accordingly, the affidavit of its
of officer has no probative value.

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Posted in STOP FORECLOSURE FRAUDComments (1)

OREGON DISTRICT COURT ISSUES A TRO AGAINST MERS, BofA and LITTON

OREGON DISTRICT COURT ISSUES A TRO AGAINST MERS, BofA and LITTON


IN THE UNITED STATES DISTRICT COURT
DISTRICT OF OREGON
PORTLAND DIVISION

NATACHE D. RINEGARD-GUIRMA, Civil Case No. 10-1065-PK

v.

BANK OF AMERICA, NATIONAL ASSOCIATION
AS SUCCESSOR BY MERGER TO LA SALLE BANK
NATIONAL ASSOCIATION, AS TRUSTEE UNDER
THE POOLING AND SERVICING AGREEMENT
DATED AS OF AUGUST 1, 2006, GSAMP TRUST
2006-HE5, MERS, LITTON LOAN SERVICING LP,
and the ORIGINAL AND PURPORTED SUCCESSOR
TRUSTEES, LSI TITLE COMPANY OF OREGON, LLC,
AND QUALITY LOAN SERVICING CORPORATION
OF WASHINGTON,

Excerpts:

On April 15, 2008, at 4:56 a.m., Marti Noriega, acting as Vice President for “Mortgage Electronic Registration Systems, Inc as nominee in favor of Mortgage Lenders Network USA, Inc.” signed an assignment of the Deed of Trust to LaSalle Bank National Association, as trustee under the Pooling and Servicing Agreement dated as of August 1, 2006, GSAMP Trust 2006-HE5 (“LaSalle Bank National Association”). The assignment was recorded on April 29, 2008. On April 21, 2008, LaSalle Bank National Association, acting through Litton Loan Servicing LP as attorney in fact, appointed LSI Title Company of Oregon, LLC as successor trustee.

The Court, however, is aware of contrary authority. In In re Allman, a case from the United
States Bankruptcy Court for the District of Oregon, the court described MERS as “more akin to that of a straw man than to a party possessing all the rights given a buyer.” Bankr. No. 08-31282-elp7, 2010 WL 3366405, at *10 (Bankr. D. Or. Aug. 24, 2010) (quoting Landmark Nat’l Bank, 289 Kan. at 539). The court considered the meaning of “beneficiary” under Oregon’s trust deed statute as “the person named or otherwise designated in a trust deed as the person for whose benefit the trust deed is given . . . .” ORS 86.705(1). The court then concluded, after examining language of the trust deed that is almost identical to the language contained in the Deed of Trust here, that MERS was not “in any real sense of the word, particularly as defined in ORS 86.705(1), the beneficiary of the trust deed.” Id. Instead, MERS was a nominee and the trust deed was for the benefit of the lender.

Additionally, other courts have held that MERS does not have authority to transfer the note,
even though it has authority to transfer the trust deed. Those courts have noted that when the note and deed of trust are split, the transfer of the deed of trust is ineffective. Bellistri v. Ocwen Loan Servicing, LLC, 284 S.W.3d 619, 623-24 (Mo. Ct. App. 2009) (in spite of deed language purporting to transfer the promissory note, MERS never held the note and the lender never gave

MERS the authority to transfer the note; thus MERS’ transfer of the deed of trust, separate from the note, was ineffective and the successor lender lacked a legally cognizable interest in the property); Saxon Mortg. Serv., Inc. v. Hillery, No. C-08-4357 EMC, 2008 WL 5170180, at *5 (N.D. Cal. Dec. 9, 2008) (same as Bellistri); In re Wilhelm, 407 B.R. 392 (Bankr. D. Idaho 2009) (successor lender had no standing to seek relief from bankruptcy stay and move forward with foreclosure because MERS had no authority to transfer the note).

Oregon cases support the notion that the security, here the Deed of Trust, is “merely an incident to the debt.” West v. White, 307 Or. 296, 300, 766 P.2d 383 (1988); see also U.S. Nat’l Bank of Portland v. Holton, 99 Or. 419, 428, 195 P. 823 (1921) (“The assignment of a mortgage, independent of the debt which it is given to secure, is an unmeaning ceremony.”). Federal courts are bound by pronouncements of the state’s highest court on applicable state law. If the state’s highest court has not decided an issue, and there is no relevant precedent from an intermediate appellate court, the federal court is to predict how the state high court would resolve it. “In assessing how a state’s highest court would resolve a state law question– absent controlling state authority–federal courts look to existing state law without predicting potential changes in that law.” Ticknor v. Choice Hotels International, Inc., 265 F.3d 931, 939 (9th Cir. 2001); see also Ryman v. Sears, Roebuck & Co., 505 F.3d 993, 994 (9th Cir. 2007).

Absent a decision from the Oregon Supreme Court or the Oregon Court of Appeals, and absent further briefing from the parties on this specific issue, I am at least initially persuaded that Rinegard-Guirma has a likelihood of success on the merits.

As for irreparable harm, loss of a home is a grievous injury.

[…]

CONCLUSION

For the foregoing reasons, Rinegard-Guirma’s Motion for a Temporary Restraining Order and Preliminary Injunction (#18) is GRANTED. The defendants are enjoined from foreclosing Rinegard-Guirma’s property described as: Lot 2, Block 16, Highland Park, in the City of Portland,County of Multnomah and State of Oregon, Assessor’s Parcel Number R180361, commonly known as 5731 NE 10th Ave., Portland, OR 97211 until the claims against MERS are resolved.

IT IS SO ORDERED.

Dated this 6th day of October, 2010.
/s/ Garr M. King
Garr M. King
United States District Judge

OREGON DISTRICT COURT ISSUES A TRO AGAINST MERS, BofA and LITTON

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Posted in assignment of mortgage, bank of america, deed of trust, Litton, MERS, MERSCORP, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., TROComments (6)

Lasalle Bank N.A. v Smith 2010: NY Slip Judge Schack does it again! Slams BAUM Law Firm!

Lasalle Bank N.A. v Smith 2010: NY Slip Judge Schack does it again! Slams BAUM Law Firm!


Here it goes Lasalle Bank V Smith on March 22, 2010. We need Judges like this all over the US who understand the fraud behind these foreclosures! Why oh Why does the same Baum Law Firm go before this Judge when they know they are going up against one Wise Man?

Judge Schack is asking for valid proof MERS and Lasalle has the authority to be nominated as part of the Note/Mortgage via a Power Of Attorney before he can issue a Judgment. LOL We know this will be impossible. This is off MERS website:

Question:

Do we need to file a power of attorney and what do we do if we are asked to produce a power of attorney?

Being appointed as a MERS Certifying Officer means that the employee is an officer of MERS and can sign as a MERS officer. A power of attorney is not needed because that is not the capacity of how a certifying officer is signing. A power of attorney would be necessary if an employee is signing as an employee of the Lender on behalf of MERS. The Corporate Resolution does not need to be recorded and is appointing the employee as an officer of MERS. In essence, the employee is a dual officer of the lender and MERS.

He also asks for the “Servicing Pool Agreement” that even permits them into the equation. I BET THERE IS NONE! Why because MERS nominates itself to speak onbehalf of many banks. This is an issue that should be raised.

As in most foreclosure cases, Judge Schack is questioning Baum Law Firm how they are representing both the Plaintiff and the Defendant in this case and seeks an explanation. I think this is the question for most of where [1] VP for [2] seperate “banks” sign multiple Assignment of Mortgages and Affidavits.

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Posted in assignment of mortgage, CONTROL FRAUD, foreclosure, foreclosure fraud, foreclosure mills, foreclosures, judge arthur schack, Law Office Of Steven J. Baum, MERS, MERSCORP, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC.Comments (1)


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